What is the treatment of the following items in connection with the retail inventory method? g. Sales return h. Employee discount i. Normal and abnormal shortage, shrinkage, spoilage and breakage

Q: Max Company has chosen to use an allowance account. When the cost of goods sold method is used with…

A: Full form of NRV is Net Realizable Value.

Q: Estimate ending inventory and cost of goods sold using the gross profit method.

A: Under gross profit method, calculation of cost of goods sold: Cost of goods sold = Sales* ( 1 -…

Q: A major advantage of the retail inventory method is that it hides costs from competitors and…

A: Inventory is the current asset (goods or stock) which is held for the business for sale purpose.…

Q: The adjusting entry to set up the ending inventory will have: (A) a credit to Sales B a debit to…

A: Ending inventory is the worth of products still available for sale and held by a corporation at the…

Q: Estimate ending inventory and cost of goods sold using the retail inventory method, applying the…

A: The retail inventory method is an accounting method used to estimate the value of a store's…

Q: When using the periodic FIFO inventory cost method, which of the following statements is true? a.The…

A: Under FIFO method the oldest products in stock is used to assess the cost of products sold. To put…

Q: Under the periodic inventory system, the journal entry to record the cost of merchandise sold at the…

A: Periodic inventory system: The method or system of recording the transactions related to inventory…

Q: Which of the following statements regarding the cost of transportation-in for the purchase of…

A: Cost of goods sold = Beginning inventory + Purchase of merchandise  + Transportation in - Ending…

Q: Explain the steps necessary to calculate and record LIFO Reserve, and consequential Write-Down under…

A: LIFO reserve refers to the inventory method which is defined as the difference among what the ending…

Q: Under the perpetual inventory system, increases and decreases in inventory are recorded through the…

A: Solution: Under perpetual inventory system, inventory records are updated with every purchase and…

Q: The conventional retail inventory method yields resultsthat are essentially the same as those…

A:

Q: In a periodic inventory system, the quantity of ending inventory is determined by: a. Looking at the…

A: Under the periodic inventory method total ending inventory can be calculated by physical count.

Q: Why does Target feel that the retail inventory method will result in inventory beingvalued at the…

A: LCM (Lower of Cost or Market) approach:   It is an approach that values the inventory at historical…

Q: What is the treatment of the following items in connection with the retail inventory method? a.…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Which inventory method provides a better matching ofcurrent costs with sales revenue on the income…

A: Inventory valuation is a method of finding the actual cost of the goods left unsold at the end of a…

Q: Identify whether each description best applies to a periodic or a perpetual inventory system.…

A: Periodic inventory system is an inventory system under which all purchase and sale transactions of…

Q: Which of the following accounts is used in the periodic inventory system but not used in the…

A: Periodic inventory system:   A periodic inventory system is one of the forms of inventory valuation.…

Q: In a cost-divided income statement, changes in purchased goods (merchandise) must be reported under…

A: Following is the answer to the given question

Q: When merchandise that was sold is returned, a credit to sales returns and allowances is made by the…

A: As per perpetual inventory system, inventory records are updated after every transaction.  When…

Q: Discuss the treatment of freight-in, purchase returns, purchase discounts, normal spoilage, sales…

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Q: A company using a perpetual inventory system that returns goods previously purchased on credit would…

A: What is perpetual inventory system? It is a system which record the changes in inventory(purchased…

Q: Under the perpetual inventory system, cost of goods sold is debited when inventory is sold and…

A: Solution: Under perpetual inventory system, inventory is updated with every purchase and sales. Cost…

Q: When preparing a worksheet for a merchandising company using periodic inventory system, which…

A: 1. The income statement contains all temporary accounts and the balance sheet contains all the…

Q: compute the ending inventory using the retail method. Explain the steps that you would use in…

A: Inventory is the good which are the products which company have for the purpose of sale by the…

Q: Which of the following accounts will not be found in the cost of merchandise sold section of the…

A: Income statement: The income statement is a financial statement that shows the net income earned or…

Q: Determine ending inventory by applying the retail inventory method.

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Q: Of what significance is inventory turnover to a retail store?

A:

Q: What does the retail inventory estimates?

A: Retail inventory method:   The retail inventory method is used to calculate the value of ending…

Q: Discuss the treatment of freight-in, net markups, normal spoilage, and employee discounts in the…

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Q: Which term is applied to the excess of revenue from sales over the cost of merchandise sold? a.net…

A: Income statement: It refers to a financial statement that presents all the income earned by the…

Q: The retail inventory method would include which of the following in the calculation of the goods…

A: An accounting method which is being used for the purpose of measuring the merchandise in the store…

Q: Which of the following should not be taken into account when determining the cost of inventory? A.…

A: As per IAS 2,  Inventory Cost of Inventory  consists  of  1. Purchase cost 2.conversion cost 3.other…

Q: What is the effect on the cost of goods sold, gross profit, and net income if ending merchandise…

A: Ending inventory is the value of inventory available on hand at the end of the accounting period.

Q: Explain how to estimate the average cost of inventory when using the retail inventory method.

A: Retail inventory method: It takes into account all the retail amounts that is, the current selling…

Q: Which of the following should be included in inventory on the balance sheet? Goods out on approval…

A: Goods purchased that are in transit F.O.B destination and raw materials will be recorded and…

Q: How do i calculate ending inventory and cost of goods sold using LIFO?

A: LIFO stands for last-in-first-out, in this method, goods which are produced at last are assumed to…

Q: Explain how the retail inventory method can be made to approximate the lower of cost or market rule.

A: Retail inventory method:   It takes into account. all the retail amounts that is, the current…

Q: If the balance in the inventory account is greater than the physical count, which of the following…

A: When inventory is found to be greater than physical count , we need to increase inventory. For…

Q: The journal entry to record a write-down of inventory from cost to its lower market value includes…

A: Inventory is very important current asset for the business. As per accounting standards, inventory…

Q: What is the inventory system called that continuously discloses the amount of inventory? Group of…

A: Solution: Under perpetual inventory system, inventory records are updated with each receipt and…

Q: Explain the retail inventory method of estimating ending inventory.

A: Retail inventory method takes into account all the retail amounts that is, the current selling…

Q: Which of the following is not a step in the retail inventory method process? a.Compute the cost of…

A: The question is based on the concept of Cost Accounting.

Q: Explain the difference between the retail inventory method using LIFO and the dollar-value LIFO…

A: LIFO: Under this inventory method, the units that are purchased last, are sold first. Thus, it…

Q: What is the treatment of the following items in connection with the retail inventory method? a.…

A: Retail Inventory method is a methodology to calculate the ending value of the inventory of the…

Q: 1. Under the periodic inventory system, Cost of Goods Sold is treated as an account. 2. Goods should…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: Explain Potential Misstatements- Inventory/ Cost of Goods Sold and the description of misstatements…

A: Internal control is a procedure for insuring that an organization's objectives in operational…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.