Crosby Department Store Estimates Inventory by Using the Retail Inventory

question 197

Multiple Choice

Crosby Department Store estimates inventory by using the retail inventory method. The following information was developed: $$\begin{array}{ll} &\text {at cost}&\text {at retail}\\\hline \text {begining inventory }&\$465,000&\$750,000\\\text { goods purchases}&900,000&1,350,000\\\text {net sales }&&1,500,000\end{array}$$ The estimated cost of the ending inventory is

• A) $210,000.
• B) $372,000.
• C) $390,000.
• D) $400,000.

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Definitions:

Current Portion

The current portion usually refers to the segment of long-term debt or loan that is due to be paid within the next fiscal year.

Long-Term Debt

Loans and financial obligations lasting over one year that appear on a company's balance sheet.

Current Liability

A current liability is a financial obligation that is due to be settled within one year or within the normal operating cycle of the business, whichever is longer.

FICA Taxes

Taxes mandated by the Federal Insurance Contributions Act, which fund Social Security and Medicare, collected from both employers and employees.