A fire destroys all of the merchandise of Assante Company on February 10, 2020. Presented below is information compiled up to the date of the fire. Inventory, January 1, 2020 $0400,000 Sales revenue to February 10, 2020 1,950,000 Purchases to February 10, 2020 1,140,000 Freight-in to February 10, 2020 60,000 Rate of gross profit on selling price 40% What is the approximate inventory on February 10, 2020?

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.