A retail company uses the retail method of inventory valued at average cost,lower-of-cost-or-market.The following information relates to 2007 (in 000's): $\begin{array} {|l|l|l| }
\hline& \text {Retail }& \text {cost }\
\hline \text { Beginning inventory, January 1, 2007.}&\$120&\$72\
\hline \text {Sales revenue. }&\$352\
\hline \text {Purchases. }&\$312&\$480\
\hline \text {Net markdowns. }&\$128\
\hline \text { Net mark-ups..}&\$40\\hline
\end{array}$
What cost ratio should be used to determine the 2007 ending inventory valuation? Do not round to the nearest intermediate value.
A)0.485
B)0.600
C)0.640
D)0.721

Question

A retail company uses the retail method of inventory valued at average cost,lower-of-cost-or-market.The following information relates to 2007 (in 000's): $\begin{array} {|l|l|l|  } 
\hline& \text {Retail }& \text {cost  }\
\hline \text { Beginning inventory, January 1, 2007.}&\$120&\$72\
\hline \text {Sales revenue. }&\$352\
\hline \text {Purchases. }&\$312&\$480\
\hline \text {Net markdowns. }&\$128\
\hline \text { Net mark-ups..}&\$40\\hline
\end{array}$
 What cost ratio should be used to determine the 2007 ending inventory valuation? Do not round to the nearest intermediate value.
A)0.485
B)0.600
C)0.640
D)0.721

Quizplus · Accepted Answer

The Answer of A retail company uses the retail method of inventory valued at average cost,lower-of-cost-or-market.The following information relates to 2007 (in 000's): $\begin{array} {|l|l|l|  } 
\hline& \text {Retail }& \text {cost  }\
\hline \text { Beginning inventory, January 1, 2007.}&\$120&\$72\
\hline \text {Sales revenue. }&\$352\
\hline \text {Purchases. }&\$312&\$480\
\hline \text {Net markdowns. }&\$128\
\hline \text { Net mark-ups..}&\$40\\hline
\end{array}$
 What cost ratio should be used to determine the 2007 ending inventory valuation? Do not round to the nearest intermediate value.
A)0.485
B)0.600
C)0.640
D)0.721

A Retail Company Uses the Retail Method of Inventory Valued