A Company Has Been Using the Retail Inventory Method, Average

Essay

A company has been using the retail inventory method, average basis, for inventory measurement. Starting in 2013, the company changed to the FIFO retail method.
At the end of 2013, the company prepared the following retail method, "pure" FIFO basis, computation which you are to complete: $\begin{array}{|l|l|l|}\hline & \text { Cost } & \text { Retail } \\\hline \text { Inventory (base) at January 1, 2002 } & \$ 4,840 & \$ 8,400 \\\hline \text { Purchases } & 25,803 & 41,600 \\\hline \text { Net additional mark-ups } & 700 & \\\hline \text { Cost ratio } & \$ 25,803 & \$ 42,300=.61 \\\hline \text { Total } & 30,643 & 50,700 \\\hline \text { Sales } & \$ 40,400 & \\\hline \text { Inventory at December 31, 2002 (FIFO) } & \$ & \$ \\\hline\end{array}$