Use this fact set for Part 2: Questions 2-7: Three retailing giants, Best Buy Co

Question

Use this fact set for Part 2: Questions 2-7: Three retailing giants, Best Buy Co., Inc. (NYSE: BBY), Amazon.com, Inc., (NASDAQ: AMZN), and Target Corporation (NYSE: TGT) each use a different inventory costing method. Best Buy uses weighted-average cost, Amazon uses FIFO, and Target uses LIFO. As you will see from the hypothetical example below, the use of a different inventory costing method will lead to differences in income statements and balance sheets. Best Buy, Amazon and Target sell a popular shirt for $33. Let’s assume that all three companies have the same sale and inventory purchase pattern for the same period. Beginning inventory: 30,000 @ $10.00 Purchases: 20,000 @ $15.00 Ending inventory: 10,000 Question 2 of 70.5 Points How many shirts were sold by each retailer during the period?

A. 10,000 shirts

B. 40,000 shirts

C. 20,000 shirts

D. 30,000 shirts

Explanation / Answer

Calculate unit sold :

Unit sold = Beginning inventory+Purchase-Ending inventory

= 30000+20000-10000

Unit sold = 40000 Shirts

So answer is b) 40000 Shirts

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