Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below: Beginning inventory Net purchases Net markups Net markdowns Net sales Cost $ 41,000 151,000 Retail $ 57,000 213,000 30,000 25,000 215,000

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…