Campbell Corporation uses the retail method to value its inventory. The following information is available for the year 2013:

Campbell Corporation uses the retail method to value its inventory. The following information is available for the year 2013:

	Cost			Retail
Merchandise inventory, January 1, 2013	$	190,000		$	280,000
Purchases		600,000			840,000
Freight-in		8,000
Net markups					20,000
Net markdowns					4,000
Net sales					800,000

Required:

Determine the December 31, 2013, inventory that approximates average cost, lower of cost or market.   Explanation:   Cost-to-retail percentage: $798,000  = 70% $1,140,000