Eaton Couses the Retail Inventory Method to Estimate Its Inventory for for Interim

Multiple Choice

Eaton Co.uses the retail inventory method to estimate its inventory for interim statement purposes.Data relating to the computation of the inventory at July 31, 2007, are as follows: $\begin{array}{lrr}&\text { Cost }& \text { Retail }\\\text { Inventory, 2/1/07 } & \$ 200,000 & \$ 250,000 \\\text { Purchases } & 1,000,000 & 1,575,000 \\\text { Markups, net } & & 175,000 \\\text { Sales } & & 1,750,000 \\\text { Estimated normal shoplifting losses } & & 20,000 \\\text { Markdowns, net } & & 110,000\end{array}$ Under the lower-of-cost-or-market method, Eaton's estimated inventory at July 31, 2007 is

A) $72,000.
B) $84,000.
C) $96,000.
D) $120,000.