The following data concerning the retail inventory method are taken from the financial records of Stone Company Cost Retail Beginning inventory $49,000 $70,000 Purchases 224,000 320,000 Freight-in 6,000 --- Net markups --- 20,000 Net markdowns --- 14,000 Sales --- 336,000 If the foregoing figures are verified and a count of the ending inventory reveals that merchandise actually on hand amounts to $54,000 at retail, the business has
a) realized a windfall gain
b) sustained a loss
c) no gain or loss as there is close coincidence of the inventories
d) none of these
Answer: b) sustained a loss
Business
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