Data Summarizing the Inventory Activity During 2013 for a Merchandising

question 138

Multiple Choice

Data summarizing the inventory activity during 2013 for a merchandising company are (000's) : $\begin{array} { | l | l | l | } \hline & \text { Cost } & \text { Retail } \\\hline \text { Beginning inventory } & \$ 110 & \$ 216 \\\hline \text { Net purchases } & 618 & 880 \\\hline \text { Net mark-ups } & 24 & \\\hline \text { Net markdowns } & ( 80 ) & \\\hline \text { Goods available for sale } & \$ 728 & \$ 1,040 \\\hline \text { Net sales } & ( 880 ) & \\\hline \text { Ending inventory at retail } \$ 160 & \\\hline\end{array}$
The company uses the retail method of valuing inventory, at average, lower-of-cost-or-market. The 2013 inventory valuation is:

• A) $99
• B) $104
• C) $112
• D) $160

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor expenses.

Sales

The total amount of goods or services sold by a company within a specific period, often used as an indicator of a company's performance.

Inventory Turnover Rate

A ratio showing how many times a company's inventory is sold and replaced over a period.

Cost of Goods Sold

The expenses directly linked to the manufacturing of products a company sells, which consist of materials and labor.