A Company Uses the Retail Inventory Method and Has the Following

question 92

Essay

A company uses the retail inventory method and has the following information available concerning its most recent accounting period:
$\begin{array}{|l|r|r|}\hline & \text { At Cost } & { \text { At Retail } } \\\hline \text { Beginning-of-period inventory } & \$ 148,600 & \$ 245,200 \\\hline \text { Net purchases } & 677,400 & 1,229,800 \\\hline \text { Sales } & & 1,200,000 \\\hline\end{array}$
(a) What is the cost-to-retail ratio using the retail method?
(b) What is the estimated cost of the ending inventory?

---

Definitions:

Financial Meltdown

An extreme financial crisis characterized by rapid devaluation of assets and major institutions' failures, leading to economic downturns.

Economic Model

An economic model is a simplified theoretical construct that represents economic processes, mechanisms, and variables to analyze and predict economic behaviors and outcomes.

Economic Model

Simplified representations of complex economic processes designed to help understand, explain, and predict economic phenomena.

Real Situation

Pertains to actual events or circumstances as they exist in reality, without hypothetical modifications.