Tucker Department Store Utilizes the Retail Inventory Method to Estimate

question 201

Multiple Choice

Tucker Department Store utilizes the retail inventory method to estimate its inventories. It calculated its cost to retail ratio during the period at 75%. Goods available for sale at retail amounted to $800,000 and goods were sold during the period for $500,000. The estimated cost of the ending inventory is

• A) $300,000.
• B) $600,000.
• C) $225,000.
• D) $400,000.

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Definitions:

Initial Value Method

An accounting approach where investments are recorded at their cost at the time of acquisition without adjustment for market changes.

Noncontrolling Interest

The portion of equity in a subsidiary not owned by the parent company, reflecting the equity interest of minority shareholders.

Consolidated Income Statement

A consolidated income statement is a financial statement that aggregates the financial performance of a company and its subsidiaries.