Three types of retail businesses are being compared: (a) jewelry store, (b) book store, and (c) grocery supermarket The type with the highest inventory turnover is most likely to be  The type with the lowest rate of gross profit is most likely to be

Q: What additional accounts would you expect to find in a manufacturing firm and how do they relate to…

A: 1) Purchase return account= It denotes the return of purchases made during the year. Relation to…

Q: Cost Retail Beginning inventory Purchases Freight in Purchase return Purchase allowance 340,000…

A: Working:

Q: Discuss the difference between the multiple-step and single-step forms of the income statement.…

A: The income statement is a financial statement that reports a company's revenues, expenses, and net…

Q: Which of the following companies would be more likely to use the specific identification inventory…

A:

Q: A home improvement store, like Lowe’s, carries the following items:Required:1. Compute the total…

A: Inventory valuation refers to monetary amounts that related with the merchandise in the stock toward…

Q: Which of the following statements is correct in the context of the Income Statement prepared by a…

A: The Income Statement is prepared in order to show the result of operating a business for a period of…

Q: For each of the following formulas, select the correct name of the formula: Sales Revenue - Sales…

A: The given formulas are matched below:

Q: Large retailers like The Home Depot and Wal-Mart typically use gross margin ratio (gross margin ÷…

A: Formulas: Gross margin % = (Gross profit / Sales) * 100 Inventory Turnover = Cost of goods sold /…

Q: The following are 3 Inventory Cost Determination Methods: 1. Specific Identification 2. FIFO 3.…

A: Specific identification is a method of inventory valuation where each item in the inventory is…

Q: A merchandising business purchases goods for resale. A merchandiser makes a profit by selling goods…

A: Under the FIFO method, the cost of goods sold contains the cost of the earliest purchases. Under the…

Q: Cost Retail Beginning inventory Purchases 340,000 4,500,000 100,000 150,000 90,000 100,000 640,000…

A: Cost of goods sold include the entire amount related to cost like direct material, direct wages,…

Q: Johnson would like to know the inventory turnover ratio. You may tell Johnson to a. Divide cost of…

A: Inventory turnover ratio provide the number of times inventory comes and is sold in a year.

Q: discuss which inventory valuation methods would most likely be used by the following businesses and…

A: Inventory valuation means identifying the stock in an organisation and finding its financial value…

Q: Assuming that all net sales figures are at retail and all cost of goods sold figures are at cost,…

A: Inventory management is very important for organizations. It helps eliminate cash trapping in…

Q: The gross margin estimation method estimates the cost of goods sold by O multiplying the costs to…

A: Gross Margin Estimation Methods for Cost of Goods Sold (COGS) are financial techniques used to…

Q: Two financial ratios that clearly distinguish a discount chain such as Walmart from ahigh-end…

A: Ratio Analysis: This refers to the performance measurement of the business, in order to know the…

Q: Which of the following businesses would most likely not report cost of goods sold on their income…

A: Cost of goods sold refers to that direct costs of the inventory the company incurred to produce the…

Q: Which company would likely have the highest inventory turnover ratio? grocery store O electronics…

A: Inventory turnover ratio = Cost of goods sold / Average inventory Higher the volume of sales, higher…

Q: If merchandise inventory is being valued at cost and the purchase price is steadily falling, which…

A: Inventory can be valued using many ways such as : FIFO LIFO Weighted Average Average cost

Q: Among the simple average pricing and weighted average pricing method. Which of the store ledger…

A: Simple Average Pricing method considers the average prices by taking only the prices and averaging…

Q: A business uses a perpetual inventory system. During periods of rising prices, cost of goods sold…

A: In FIFO the earliest  goods ( beginning) will be sold first.

Q: 6. Discuss the inventory policies of Nordstrom to that of other department or retail stores.  Does…

A: Inventory policies are used to establish the optimal route for a product to move through with a…

Q: Why would the inventory turnover ratio be more important for someone analyzing a grocerystore chain…

A: Inventory turnover ratio means how many times the inventory is turned in a year. It is expressed in…

Q: Which of the following is not a step in the retail inventory method process? a.Compute the cost of…

A: The question is based on the concept of Cost Accounting.

Q: The revenue account for a merchandising business is typically called ___________. Group of answer…

A: Solution: Merchandise business generally involves purchase and sales of merchandise. It is a type of…

Q: The sales revenue section of an income statement for a retailer would not include Select one: a.…

A: The sales revenue section of an income statement for a retailer would not include

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.