Harvey's Junk Jewelry started business January 1, 2021, and uses the LIFO retall method to estimate ending Inventory. Listed below is data accumulated for the year ended December 31, 2021: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Net sales Employee discounts Cost $16,800 50,800 4,300 3,500 Retail $24,800 79,800 4,400 2,900 5,900 72,400 2,500 The denominator for the current period's cost-to-retall percentage is:

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…