Dicer Uses the Conventional Retail Method to Determine Its Ending

question 50

Multiple Choice

Dicer uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $260,000 ($396,000) , purchases during the current year at cost (retail) were $1,370,000 ($2,200,000) , freight-in on these purchases totaled $86,000, sales during the current year totaled $2,000,000, and net markups (markdowns) were $48,000 ($72,000) . What is the ending inventory value at cost?

• A) $371,228.
• B) $378,092.
• C) $386,804.
• D) $572,000.

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Definitions:

Depreciated

Depreciation refers to the reduction in the value of an asset over time due to wear and tear or obsolescence.

Fair Value

The cost one would incur for acquiring an asset or the amount one would need to pay off a debt in a smooth transaction between parties in the market as of the date of valuation.

Land

The surface of the earth, considered as property and a basis for real estate transactions.