PART V — INVENTORY: SHORT PROBLEMS  Instructions: Complete the requirements specified for each of the following independent situations. 1.State the missing items identified by “?”. A.?  +  Purchases  –  Purchases discounts  –  Purchases returns and allowances +  Freight-in  =  ? B.Net purchases  +  ?  =  Cost of goods purchased C.Net purchases  +  ?  +  ?  =  Purchases 2.Pettitte Company uses the lower of cost or market (LCM) basis for its inventory. The following information relates to its December 31, 2012, inventory. Determine the amount of the ending inventory applying LCM to individual items.       December 31, 2012        ProductUnitsUnit CostMarket A600$1720 B3502825 C4001517 D2503129

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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.