Show This preview shows page 6 - 9 out of 12 pages. 29.The retail inventory method requires that a record be kept of all of thefollowing except the:A.total cost and retail value of goods available for sale.B.total cost and retail value of freight costs.C.sales for the period.D.total cost and retail value of goods purchased. 30.How is the gross profit method used as it relates to inventoryvaluation? Get answer to your question and much more 31.An inventory method which is designed to approximate inventoryvaluation at the lower of cost or market is Get answer to your question and much more 32.To produce an inventory valuation which approximates the lower ofcost or market using the conventional retail inventory method, thecomputation of the ratio of cost to retail should Get answer to your question and much more 33.Which of the following is true of normal shortages?A.They are deducted from both the cost and retail columns.B.These goods are no longer available for sale.C.This loss is considered in calculating cost-to-retail ratio.D.They do not include theft and shrinkage. 34.The reason for eliminating the price change in inventory under thedollar value LIFO retail method is: Get answer to your question and much more Chapter 8:1.Jones Wholesalers stocks a changing variety of products. Whichinventory costing method will be most likely to give Jones the lowestending inventory when its product lines are subject to specific priceincreases? Get answer to your question and much more 2.The weighted-average for the year inventory cost flow method isapplicable to which of the following inventory systems? Get answer to your question and much more 3.Generally, which inventory costing method approximates most closelythe current cost for each of the following?Cost of goodssoldEndinginventoryA. LIFOFIFOB. LIFOLIFOC. FIFOFIFOD. FIFOLIFO 4.Which of the following would be included in the balance sheet of amerchandiser? Get answer to your question and much more Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 12 pages? Upload your study docs or become a Course Hero member to access this document Tags FIFO and LIFO accounting, original cost of an inventory item Bronte Corporation acquired two inventory items at a lump-sum cost of $160,000. The acquisition included 6,000 units of product A, and 14,000 units of product B. Product A normally sells for $24 per unit, and product B for $8 per unit. If Bronte sells 2,000 units of A, what amount of gross profit should it recognize? >$18,000. >$18,000. Solution: The sales value of A is (6,000 units X $24 each) $144,000 and the B is (14,000 units X $8 each) $112,000 totaling $256,000. Thus, the cost allocated to A based on relative sales values is ($144,000 / $256,000) 56.25% of the $160,000 or $90,000. The cost per unit of A is ($90,000/6,000) $15.00 making 2,000 units worth $30,000. Revenues of $48,000 less $30,000 results in a gross profit of $18,000. Crown Corporation acquired two inventory items at a lump-sum cost of $60,000. The acquisition included 3,000 units of product X001, and 3,000 units of product X002. X001 normally sells for $20 per unit, and X002 for $10 per unit. If Crown sells 1,000 units of X002, what amount of gross profit should it recognize? >$6,670. >$3,330. Solution: The sales value of X001 is (3,000 X $20 each) $60,000 and the X002 units are (3,000 X $10 each) $30,000 totaling $90,000. Thus, the cost allocated to X002 based on relative sales values is ($30,000/$90,000) 33.33% of the $60,000 or $20,000. The cost per unit of X002 is ($20,000/3,000) $6.67 making 1,000 units worth $6,670. Revenues of $10,000 less cost of $6,670 results in a gross profit of $3,330. The following data concerning the retail inventory method are taken from the financial records of Stone Company. Cost Retail If the foregoing figures are verified and a count of the ending inventory reveals that merchandise actually on hand amounts to $54,000 at retail, the business has: >none of these. >sustained a loss. Solution: Ending inventory at retail is ($70,000 + $320,000 + $20,000 - $14,000 - $336,000) $60,000 according to the financial records, while inventory on hand, at retail, is only $54,000. Therefore it is a loss. Assume that Darcy Industries had the following inventory values. Inventory cost (on December 31, 2012) $1,500 Under IFRS, what is the inventory carrying value on December 31, 2012? >$1,570. What is the retail inventory method quizlet?-The objective in the retail method is to calculate ending inventory at retail, and then convert it from retail to cost. Initial markup: -Original amount of markup from cost to selling price.
When using the retail inventory method which of the following is deducted from the retail column in the same way as sales?Employee discounts should be deducted from the retail column in the same way as sales. 17.
What is needed to find the cost of ending inventory in the retail inventory method?Calculating Ending Retail Inventory
The retail inventory method calculates the ending inventory value by totaling the value of goods that are available for sale, which includes beginning inventory and any new purchases of inventory. Total sales for the period are subtracted from goods available for sale.
Is inventory recorded at cost or retail?Inventories are reported at cost, not at selling prices. A retailer's inventory cost is the cost to purchase the items from a supplier plus any other costs to get the items to the retailer.
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The retail inventory method requires that a record be kept of all of the following except the:
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