Retail Method Many Large Retailers Take a Physical Inventory near Year-End and Year-End

question 94

Essay

Retail method
Many large retailers take a physical inventory near year-end and state in their annual report that inventory has been valued by the "retail method." What does this mean? (Your answer should address [1] whether inventory is valued in the financial statements at cost or retail prices,and [2] how this dollar amount is determined.)

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, granting them rights to dividends and a stake in the corporate assets and earnings.

Shares

Units of ownership interest in a corporation or financial asset, representing a portion of the shareholder's stake in the company.

Board Of Directors

A group of elected individuals who oversee the activities and governance of a corporation, ensuring it operates in the best interests of its shareholders.

Corporate Policies

Guidelines developed by an organization to govern its actions and ensure compliance with laws, regulations, and internal rules.