Using the retail inventory method, if the cost to retail ratio is 70% and ending inventory at retail is
$145,000, then estimated ending inventory at cost is $207,143.

Question

Quizplus · Accepted Answer

To calculate estimated ending inventory at cost using the retail inventory method, we need to multiply the ending inventory at retail by the cost-to-retail ratio. In this case, $145,000 x 0.7 = $101,500, which is the estimated ending inventory at cost. Therefore, the statement is false.

Using the Retail Inventory Method, If the Cost to Retail