Reference no: EM132838588

Problem - Empress Company used the retail inventory method to approximate the ending inventory.

The following information is available for the current year.

	Cost	Retail
Beginning inventory	650,000	1,200,000
Purchases	9,000,000	14,700,000
Freight in	200,000
Purchase returns	300,000	500,000
Purchase allowances	150,000
Departmental transfer in	200,000	300,000
Net markup		300,000
Net markdown		1,000,000
Sales		9,500,000
Sales discounts		100,000
Employee discounts		500,000
Estimated normal shoplifting losses		600,000
Estimated normal shrinkage		400,000

Required -

a. What is the estimated cost of the ending inventory if the conservative approach was used?

b. What is the estimated cost of the ending inventory if the average cost approach was used?

c. What is the estimated cost of the ending inventory if the FIFO approach was used?

Note - Please present the solution in good accounting form.