To use the retail inventory method, a company must maintain records of inventory and purchases at cost and at current selling price.
What is the Retail Inventory Method?
The retail inventory method is a method of accounting used to analyse the value of a store's merchandise. The retail method gives the ending inventory balance for a store by calculating the cost of inventory similar to the price of the merchandise.
What are benefits of the retail inventory method and how is it applied?
The main benefits of the retail inventory method lies in its simplicity. It's a quick calculation that can give you an probable of how much inventory you have. This can help you in taking decisions when it comes to purchasing and budgeting.
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Answer:
6.75
Explanation:
Given that,
Gross sales = $150,000
Accounts receivable, beginning of year = $18,000
Sales = $135,000
Accounts receivable, end of year = $22,000
Average accounts receivables:
= (Beginning AR + Ending AR) ÷ 2
= ($18,000 + $22,000) ÷ 2
= $40,000 ÷ 2
= $20,000
Accounts receivable turnover:
= Sales ÷ Average accounts receivables
= $135,000 ÷ $20,000
= 6.75
Note: Accounts receivable, end of year is missing from the question. It is amounted to $22,000.
<span>Walmart is engaged in Competitive Analysis. This involves a comparison of what Target is doing and how that may relate to or affect Walmart. This could include things such as customer experience, sales, inventory, or several various aspects of their business.</span>