Response to the following questions:
1. Using the retail method and the following data, estimate the cost of ending inventory.
Cost Retail
Beginning inventory . . . . . . . . . . . . . . . $324,000 $530,000
Cost of goods purchased . . . . . . . . . . 195,000 335,000
Net sales . . . . . . . . . . . . . . . . . . . . . . . 320,000
2. What does the full-disclosure principle prescribe if a company changes from one acceptable accounting method to another?
3. Can a company change its inventory method each accounting period? Explain.