Use the information provided to compute the ending inventory using the retail method. Sales $800,000; Goods available for sale at Cost $500,000 and at retail $1,000,000. $400,000 None of the choices are correct. $300,000 $200,000 $100,000
Use the information provided to compute the ending inventory using the retail method. Sales $800,000; Goods available for sale at Cost $500,000 and at retail $1,000,000. $400,000 None of the choices are correct. $300,000 $200,000 $100,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 7MCQ
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Use the information provided to compute the ending inventory using the retail method. Sales $800,000; Goods available for sale at Cost $500,000 and at retail $1,000,000.
$400,000
None of the choices are correct.
$300,000
$200,000
$100,000
Expert Solution
Step 1
Ending inventory using the retail method = Ending inventory at retail x Cost to retail ratio
where,
Cost to retail ratio = Goods available for sale at Cost / Goods available for sale at retail
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