Garrison Company Uses the Retail Method of Inventory Costing

question 117

Multiple Choice

Garrison Company uses the retail method of inventory costing. It started the year with an inventory that had a retail cost of $45,000. During the year, Garrison purchased an inventory with a retail sales value of $300,000. After performing a physical inventory, Garrison calculated the inventory at retail to be $80,000. The markup is 100% of cost. Determine the ending inventory at its estimated cost.​

• A) $160,000
• B) $80,000
• C) $40,000
• D) $45,000

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Definitions:

Evaluate

To calculate the numerical value of an expression, equation, or function when certain values are known or substituted for variables.

Simplify

To reduce a mathematical expression to its simplest form by performing operations and combining like terms.

Evaluate

The process of calculating the value of an expression.

Simplify

To simplify an expression means to reduce it to its simplest form, by performing all possible operations and combining like terms.