Hawkeye Auto Parts Uses the Retail Method to Estimate Inventories

question 82

Multiple Choice

Hawkeye Auto Parts uses the retail method to estimate inventories. Data for the first six months of 2013 include: beginning inventory at cost and retail were $55,000 and $100,000, net purchases at cost and retail were $785,000 and $1,300,000, and sales during the first six months totaled $800,000. The estimated inventory at June 30, 2013, would be:

• A)$330,000.
• B)$360,000.
• C)$362,300.
• D)None of the above is correct.

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Definitions:

Net Loss

A situation where total expenses exceed total revenues during a specific period, resulting in negative profit.

Net Cash Flow

The difference between a company's cash inflows and outflows within a specific period.

Operating Activities

Transactions related to the core business operations of a company, including revenue-generating activities and expenses necessary for generating revenue.

Prepaid Expenses

Expenses paid for in advance of the period in which they will be used or consumed, recorded as assets on a balance sheet until the benefit is received.