A Company Uses the Retail Inventory Method and Has the Following

question 148

Essay

A company uses the retail inventory method and has the following information available concerning its most recent accounting period:
$\begin{array}{|l|r|r|}\hline & {\text { At Cost }} & {\text { At Retail }} \\\hline \text { Beginning-of-period inventory } & \$ 148,600 & \$ 245,200 \\\hline \text { Net purchases } & 677,400 & 1,229,800 \\\hline \text { Sales } & & 1,200,000 \\\hline\end{array}$ (a) What is the cost-to-retail ratio using the retail method?
(b) What is the estimated cost of the ending inventory?

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Definitions:

Indirect Approach

A communication strategy that involves presenting the main message after providing the background information, rationale, or reasoning.

Emotional Investment

The extent of emotional energy, interest, or commitment one puts into a task, relationship, or issue.

Negative News

Information that is unfavorable or disappointing, often requiring careful communication to minimize adverse reactions.

Direct Approach

A communication style where the main point or message is presented at the beginning, followed by supporting details.