Question

PLEASE HELP!!

John's bikes uses the retail inventory method sales at retail were $120,000. Net purchases were $68,000 at cost and $124,000 at retail. Beginning inventory was $32,000 at cost and $76,000 at retail method, what was the inventory at cost?
A.$24,000
B.$120,000
C.$40,000
D.$60,000

Answer 1

The answer is C

If you need more explanation let me know and I can explain to you how I got that:)

Answer 2

C. $40,000

Explanation:

Cost Retail

Beginning Inventory $32,000 $76,000

Add: Purchases 68,000 124,000

Goods available for sale 100,000 200,000

Deduct: Sales 120,000

Ending Inventory at Retail 80,000

Ratio of cost (100,000 ÷ 200,000 = 0.5) 50%

End. Inv. at Cost (80,000 x 50%) 40,000

Hope this helps!