3. For the first calendar quarter just ended, STEVEN Company would like to estimate
its ending inventory for interim reporting purposes. It reported the following
information during the quarter:
Cost Retail
Inventory, January 1 P656,000 P1,010,240
Gross purchases 2,240,000 3,597,760
Purchase returns 288,000 400,000
Freight in 64,000
Net markups 360,000
Net markdowns 256,000
Sales 3,280,000
Sales returns 240,000
Employee discounts 80,000
Sales discounts 64,000
Normal losses 28,800 40,000
Abnormal losses 192,000 312,000
Required: Determine the (a) estimated cost of inventory as of March 31, 2023; and
(b) cost of goods sold for the quarter ending March 31, 2023 under each of the
following independent retail inventory methods (round off cost ratio to two decimal
percentage, e.g., 12.3456...% shall be rounded to 12.35%):
1. Average method
2. Lower of cost or market (conservative) method
3. FIFO method.
