The Following Data Concerning the Retail Inventory Method Are Taken

question 145

Essay

The following data concerning the retail inventory method are taken from the financial records of a small company. $\begin{array}{lrr}&\text { At Cost } & \text { At Retail } \\ \text {Beginning inventory }& \$37,200&\$60,000\\ \text {Purchases.}&182,000&308,000 \\ \text {Freight-in. }& 2,800&--\\ \text {Net mark-ups. }&---&2,000 \\ \text {Net markdowns. }&---&3,480 \\ \text {Sales. }&---&313,520 \\\end{array}$ (a) The ending inventory at retail should be: $_______________.
(b) If the ending inventory is to be valued at approximately the lower-of-cost-or-market,FIFO basis,the calculation of the cost to retail ratio should be based on goods available for sale at (1) cost and (2) retail,respectively,of: $________________ and $_________________.

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Definitions:

Activity Levels

Various measures of operational intensity or volume of work done by a company, used in budgeting and cost management.

Finished Goods Account

The finished goods account is an inventory account that tracks the cost of manufactured goods or products that are completed and ready for sale.

Management Accounting

The field of accounting focused on providing financial data and analysis to managers within organizations to assist in decision-making.

External Users

Individuals or entities outside of a company who use its financial statements and other information to make decisions, such as investors or creditors.