A method for estimating the inventory of a retailer. This method requires that the retail amounts and the related cost amounts are available for beginning inventory and purchases. An illustration of this technique is available near the end of the Explanation of Inventory and Cost of Goods Sold. Intermediate accounting textbooks and accounting professionals will provide more of the complexities involving markdowns, discounts to employees, etc.
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For the past 52 years, Harold Averkamp (CPA, MBA) has
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