The Following Information Is Available for the Past Month for a Retail

question 109

Multiple Choice

The following information is available for the past month for a retail store: $$\begin{array} { | l | r | } \hline \text { Sales } & \$ 105,000 \\\hline \text { Markups } & \$ 10,000 \\\hline \text { Markdowns } & \$ 8,000 \\\hline \text { Purchases (at cost) } & \$ 38,800 \\\hline \text { Purchases (at retail) } & \$ 107,000 \\\hline \text { Beginning inventory (at cost) } & \$ 33,000 \\\hline \text { Beginning inventory (at retail) } & \$ 48,000 \\\hline\end{array}$$
What is the ending inventory at cost using the basic retail method? (Round cost-to-retail ratios to four decimal places.)

• A) $23,780
• B) $28,220
• C) $52,000
• D) $15,000

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Definitions:

Equipment

Tangible personal property that is used in operations, such as machinery, computers, and furniture, which is not intended for sale.

Closing Entries

At the conclusion of an accounting period, closing entries refer to the journal entries that are recorded to move the balances from temporary accounts to permanent accounts, which helps in getting the accounts ready for the upcoming period.

Classified Balance Sheet

A balance sheet that organizes assets and liabilities into subcategories such as current and long-term.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, presented in a structured manner.