ACCOUNTING-The records for the Clothing Department of Sharapova’s Discount Store

The records for the Clothing Department of Sharapova’s Discount Store are summarized below for the month of January.Presented below is information related to Waveland Inc.CostRetailInventory, 12/31/14$293,800$401,000Purchases1,022,3581,476,000Purchase returns63,54083,000Purchase discounts20,070—Gross sales revenue—1,414,200Sales returns—97,300Markups—130,200Markup cancellations—49,100Markdowns—51,100Markdown cancellations—28,500Freight-in42,520—Employee discounts granted—8,300Loss from breakage (normal)—5,400Assuming that Waveland Inc. uses the conventional retail inventory method, compute the cost of its ending inventory at December 31, 2015.(Round ratios for computational purposes to 0 decimal places, e.g 78% and final answer to 0 decimal places, e.g. 28,987.)Ending inventory using the conventional retail inventory method$The records for the Clothing Department of Sharapova’s Discount Store are summarized below for the month of January.Inventory, January 1: at retail $25,700; at cost $19,600Purchases in January: at retail $170,900; at cost $111,391Freight-in: $8,420Purchase returns: at retail $3,900; at cost $2,360Transfers in from suburban branch: at retail $14,960; at cost $7,850Net markups: $8,610Net markdowns: $4,270Inventory losses due to normal breakage, etc.: at retail $390Sales revenue at retail: $95,870Sales returns: $2,940(a) Compute the inventory for this department as of January 31, at retail prices. (Round ratios for computational purposes to 0 decimal places, e.g 78% and final answer to 0 decimal places, e.g. 28,987.)Ending inventory at retail$(b) Compute the ending inventory using lower-of-average-cost-or-market. (Round ratios for computational purposes to 0 decimal places, e.g 78% and final answer to 0 decimal places, e.g. 28,987.)Ending inventory at lower-of-average-cost-or-market$Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes in northern New Jersey and southern New York. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2014, and Jim Alcide, controller for Garcia, has gathered the following data concerning inventory.At May 31, 2014, the balance in Garcia’s Raw Materials Inventory account was $568,344, and Allowance to Reduce Inventory to Market had a credit balance of $27,870. Alcide summarized the relevant inventory cost and market data at May 31, 2014, in the schedule below.Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcia’s May 31, 2014, financial statements for inventory under the lower-of-cost-or-market rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle.CostReplacement CostSales PriceNet Realizable ValueNormal ProfitAluminum siding$ 97,510$ 87,063$ 89,152$ 78,008$ 7,104Cedar shake siding119,798110,604130,942118,12610,308Louvered glass doors156,016172,732259,655234,44225,771Thermal windows195,020175,518215,636195,02021,452 Total$568,344$545,917$695,385$625,596$64,635(a1)Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2014.Balance in the Allowance to Reduce Inventory to Market$(a2)For the fiscal year ended May 31, 2014, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market.The amount of the loss$