Helo I System Announcements CALCULATOR PRINTER VERSION BACK Multiple Choice Ques
ID: 2438356 • Letter: H
Question
Helo I System Announcements CALCULATOR PRINTER VERSION BACK Multiple Choice Question 113 Carla Vista Sales Company uses the retail inventory method to value its merchandise inventory. The following information is available for the current year: Cost Retail Beginning inventory $37000 Purchases Freight-in Net markups Net markdowns Employee discounts Sales revenue $52000 260000 330000 3200 9200 13500 -1000 275000 If the ending inventory is to be valued at the lower-of-cost-or-market, what is the cost-to-retail ratio? $300200$377700 $300200$391200 $297000 $395500 @ $300200 ÷ $382000 Click if you would like to Show Work for this question: Open Show WorlkExplanation / Answer
The cost to retail ratio is calculated by dividing the goods available for sale at cost by the goods available for sale at retail price.
In the given question:
Goods available for sale at cost = $37,000 + $260,000 + $3,200 = $300,200
Goods available for sale at retail price = $52,000 + $330,000 + $9,200 = $391,200
Therefore,
The cost to retail ratio is $300,200 ÷ $391,200
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