Why does Target feel that the retail inventory method will result in inventory beingvalued at the lower of cost or market?

Q: AD, Inc. uses the LIFO-lower of cost or market method to value inventory. If the inventory value is…

A: For financial reporting purposes, will value the inventory in accounting at lower prices or on the…

Q: Under what circumstances is the relative sales value an appropriate basis for determining the price…

A:

Q: What effect does each method used have on the firm’s reportedprofits? On ending inventory levels?

A: Answer: The following is the effect that each method of inventory on firms reported profits:…

Q: In what ways would a reduction in inventory help the company

A: Inventory refers to all the items, goods, merchandise, and materials held by a business for selling…

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

A:

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

A: Solution:- The following should not be taken into account when determining the cost of inventory as…

Q: Which of the following statement about the inventory write-down is not correct? * If the cost is…

A: As per International Accounting Standards IAS 2- “ Inventory includes assets that are held for the…

Q: Which of the following companies would be more likely to use the specific identification inventory…

A:

Q: For all short exercises, assume the perpetual inventory system is used unless stated otherwise.…

A: Definition:

Q: Identify that if prices are rising, which inventory cost flow method will produce the highest amount…

A: solution Identify that if prices are rising, which inventory cost flow method will produce the…

Q: The conventional retail inventory method is based on:   Multiple Choice   Average cost.   LIFO…

A: The conventional retail method is based on the relation between the cost of the product and the…

Q: If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of…

A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…

Q: Briefly explain the usefulness of the inventory figure resulting from the application of lower of…

A: Net Realizable Value(NRV) refers to the inventory value which a business entity can realize from…

Q: By having different inventory methods that result in different costs of goods sold and gross profit,…

A: Inventory refers to the stock of work-in-process, raw material & finished goods in the company.…

Q: Why would a company choose to use an inventory costing method that estimates the cost of the goods…

A: In this question, we  explain that why would a company choose to use an inventory costing method…

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: ith inflation, what are the implications of using LIFO and FIFO inventory methods? How do they…

A: FIFO: First in, first out (FIFO) is a method of asset management and valuation in which assets…

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

A: Retail inventory method : The retail inventory method is the accounting method for estimation of the…

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: If ABC uses the average retail method, how much would the estimated ending inventory be?

A: Retail Inventory method is used to verify the Ending Inventory Value. There are 2 methods: Average…

Q: Can an inventory turnover be too high?

A: The inventory turnover ratio is nothing but the number of times an entity is replacing the goods. It…

Q: What does a very high inventory turnover ratio signify? Please provide your own example to explain…

A: Inventory turnover ratio is one of the efficiency ratio, which says and calculates how many times…

Q: ic inventory system wants to remove beginning estimated returns inventory, which of the following…

A: The right answer is option a.Estimated Returns Inventory

Q: Explain how the inventory valuation method (LIFO or FIFO) chosen by a company affects the cost of…

A: Inventory management refers to the valuation of inventory in three ways FIFO, LIFO and weighted…

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: Why would a "Just in Time" inventory management practice be preferred over a "Just in Case inventory…

A: Just in Time Inventory Management:- It is the inventory technique where labor, material, and other…

Q: Both the gross profit method and the retail inventory method provide a way to estimate ending…

A: Gross Profit Method: Under this method, the beginning inventory is added to the net purchases during…

Q: An increase in the inventory turnover rate is indicative of: Multiple Choice a decrease in the cost…

A: Inventory turnover rate is calculated as ratio of cost of goods sold and inventory

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: What is the dollar-value method of LIFO inventory valuation?What advantage does the dollar-value…

A:

Q: What will be the correct answer for weight average cost method for ending inventory and cost of…

A: Weighted average Cost per unit=11-6×$70+14×$10511-6+14=$182019=$95.79

Q: Which of the following regarding the lower of cost ormarket rule for inventory are true?(i) The…

A: Option c is correct.

Q: What is the purpose of the lower of cost or net realizable value rule?

A: lower of cost or net realizable value rule(LCNRV method):Inventory should be valued at the lower of…

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.