Garrison Company uses the retail method of inventory costing. It started the year with an Inventory that had a retall cost of $47,100.00. During the year, Garrison purchased an inventory with a retail sales value of $780,895.00. After performing a physical inventory, Garrison found the inventory at retall to be $51,333.00. The markup is 100% of cost.

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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.