A Business Uses the Retail Inventory Method to Estimate the Value

question 97

Multiple Choice

A business uses the retail inventory method to estimate the value of the ending inventory. For the month of June, the cost of goods available for sale is $15,900 at cost and $22,100 at retail. The cost ratio is:

• A) 71.9%.
• B) 28.05%.
• C) 39%.
• D) None of these is correct.

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Definitions:

High Dividend Payout

This term refers to companies that return a large portion of their earnings to shareholders in the form of dividends.

Bond Indenture

A legal contract specifying the terms and conditions under which a bond has been issued, including the interest rate and maturity date.

Restricted

Pertains to assets or securities that are not fully transferable until certain conditions have been met, often used in reference to stocks.

Bond Indenture Agreements

Legal documents specifying the rights and obligations of both the issuing company and the bondholders, including details about interest payments and the maturity date.