West Retail Uses the Retail Method of Inventory Valued at Average

question 2

Multiple Choice

West Retail uses the retail method of inventory valued at average cost, lower of cost and market. The following information relates to 2019: $$\begin{array} { | l | r | r | } \hline & \text { Cost (\$) } & \text { Retail (\$) } \\\hline \text { Beginning inventory, January 1, 2019 } & \$ 700 & \$ 1,000 \\\hline \text { Sales revenue } & & 4,300 \\\hline \text { Purchases } & 2,940 & 4,000 \\\hline \text { Net mark-downs } & & 100 \\\hline \text { Net mark-ups } & & 200 \\\hline\end{array}$$ What is the retail value of the 2019 ending inventory?

• A)$560
• B)$700
• C)$800
• D)$1,000

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Definitions:

Money Supply

The sum of all available money in an economy at a given moment, encompassing cash, coins, and bank account balances.

Real GDP

The measure of the value of economic output adjusted for price changes (inflation or deflation), reflecting the real volume of production.

Price Level

The overall price mean for each and every product and service in the economic sector.

Aggregate Supply Curve

A graphical representation showing the relationship between the overall price level in an economy and the total output produced by firms at that price level.