Charleston Company has elected to use the dollar-value LIFO retail method to value its inventory. The following data has been accumulated from the accounting records: Cost Retail Merchandise inventory, January 1, 2024 $ 320,000 $500,00 O Net purchases 670,000 1,020,000 Net markups 14,000 Net markdowns 4,000 Net sales 650,000 Pertinent retail price indexes: January 1, 2024 1.00 December 31, 2024 1.10 Required: Estimate the ending inventory for December 31, 2024. Note: Round "Cost-to-retail percentage" to the nearest whole percent.

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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.