on january 1, 2021, pet friendly stores adopted the retail inventory method. inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows: 2021 2022 cost retail cost retail beginning inventory $ 121,600 $ 190,000 purchases 520,000 708,000 $ 630,000 $ 1,056,000 purchase returns 2,500 5,000 3,000 3,600 freight-in 4,200 6,000 net markups 6,300 9,400 net markdowns 4,300 6,800 net sales to customers 570,000 698,000 sales to employees (net of 25% discount) 16,500 16,500 normal spoilage 1,500 5,700 price index: january 1, 2021 1.00 december 31, 2021 1.20 december 31, 2022 1.60