A Company Reports the Following Information Regarding Its Inventory

question 169

Multiple Choice

A company reports the following information regarding its inventory. Beginning inventory: cost is $80,000; retail is $130,000
Net purchases: cost is $65,000; retail is $120,000
Sales at retail: $145,000
The year-end inventory shows $105,000 worth of merchandise available at retail prices.What is the cost of the ending inventory calculated using the retail inventory method?

• A)$135,000.
• B)$73,125.
• C)$60,900.
• D)$72,900.
• E)$105,000.

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Definitions:

Prepaid Interest

Interest payments made in advance of their due date, typically associated with the initial costs of obtaining a mortgage.

Recurring Cost

Expenses that occur at regular intervals, such as monthly rent or annual subscriptions.

Back-end Ratio

The back-end ratio measures a person's total debt payments as a percentage of their income, commonly used by lenders to assess borrowing capacity.

Pre-approved

An initial approval indicating a customer may qualify for certain loans or credit cards, usually based on a preliminary credit information review.