Multiple Choice Question 118 The following data concerning the retail inventory
ID: 2479375 • Letter: M
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Multiple Choice Question 118 The following data concerning the retail inventory method are taken from the financial records of Welch Company. Cost Retail Beginning inventory $ 147,000 $ 210,000 Purchases 672,000 960,000 Freight-in 18,000 — Net markups — 60,000 Net markdowns — 42,000 Sales — 1,008,000 Assuming that the LIFO inventory method were used in conjunction with the data and that the inventory at retail had increased during the period, then the computation of retail in the cost-to-retail ratio would
include both markups and markdowns and exclude beginning inventory.Explanation / Answer
If LIFO inventory method were used in conjunction with the data and that the inventory at retail had increased during the period, then the computation of retail in the cost-to-retail ratio would d) would exclude both markup and mark downs and include beginning inventory.
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