From the following, calculate the cost ratio and the cost of ending inventory to the nearest cent under the retail method. (Round the "cost ratio" to the nearest hundredth percent. Round the "cost of ending inventory" to the nearest cent.)   Net sales at retail for year $ 40,000 Beginning inventory—cost $ 27,000 Beginning inventory—retail $ 49,000 Purchases—cost $ 14,000 Purchases—retail $ 19,000         Cost Retail Beginning inventory       Net purchases       Cost of goods available for sale       Less net sales at retail       Ending inventory at retail       Cost ratio     % Ending inventory at cost

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A: INVENTORY VALUATIONInventory Valuation is a Method of Calculation of Value of Inventory at the End…

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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.