Barbara Operates a Sporting Goods Store

question 69

Multiple Choice

Barbara operates a sporting goods store. She uses the cash method and treats inventory as non-incidental supplies. At the beginning of the year, she had inventory of $26,000. She purchased $470,000 of goods during the year. Her ending inventory was $42,000. She makes sure to pay all of her suppliers by the last day of her tax year. What is Barbara's inventory deduction for the year?

• A) $428,000.
• B) $454,000.
• C) $470,000.
• D) $538,000.
• E) None of the above.

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Definitions:

Marketing Channel

Critical actions or procedures required to shift goods' ownership from the production point to the consumption point.

Profitability

The financial success indicated by the surplus of income over expenses, demonstrating a company's ability to generate earnings.

Margins Earned

The difference between the cost of producing or purchasing goods and the revenue generated from selling them, typically expressed as a percentage of revenue.

Channel Member

A participant in the distribution channel that helps in bringing the product from the manufacturer to the final consumer.