A retailer needs to determine the cost of the shoes the company purchased in order to determine the inventory

value to report on its balance sheet in a particular period. (1) Discuss the steps involved in determining the cost of shoes inventory as reported on the company’s balance sheet (15 points), and (2) use an example to show the impact of purchase discounts and allowances received by the company on the cost of shoes inventory (10 points). (Points : 25)