Question: Please answer each item. The book reference is Intermediate Accounting 1 by Valix. Topic: Retail Inventory Method 1. Explain the use of the retail inventory

Please answer each item. The book reference is Intermediate Accounting 1 by Valix.

Topic: Retail Inventory Method

1. Explain the use of the retail inventory method.

2. What is the basic formula for the retail method?

3. What are the three approaches in applying the retail inventory method?

4. What is the meaning of the following? a. Initial Markup b. Original Retail c. Additional Markup d. Markup Cancelation e. Net Markup f. Markdown g. Markdown cancelation h. Net markdown i. Maintained Markup j. Mark-on 5. What is the treatment of the following items in connection with the retail inventory method? a. Purchase Discounts b. Purchase Returns c. Purchase Allowances d. Freight in e. Sales Discount f. Sales Allowance g. Sales Return h. Employee Discount i. Normal and abnormal shortage, shrinkage, spoilage and breakage j. Departmental transfer in k. Departmental transfer out

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