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Retail Method A business using the retail method of inventory costing determines that the inventory at...

Retail Method

A business using the retail method of inventory costing determines that the inventory at retail is $1,235,000. If the ratio of cost to retail price is 54%, what is the amount of inventory to be reported on the financial statements? ($)
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Answer #1
Inventory at retail price means selling price of the inventory is $ 12,35,000 and its cost is 54%
Inventory in balance sheet will shows only at cost price of the stock
So the cost price of the inventory will be reported in the balance sheet.
CALCULATION OF THE COST OF THE INVENTORY
Inventory at retail price = $                          12,35,000
Cost to retail price is 54% .
Cost = $ 1,235,000 X 54 % = $                            6,66,900
So, Answer = inventory value in the financial report = $ 666, 900
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