A business using the retail method of inventory costing determines that inventory at retail is $2,300,000. If the ratio of cost to retail price is 55%, what is the amount of inventory to be reported on the financial statements?

Retail Method

An inventory valuation method used in the retail industry to estimate the ending inventory value, based on the relationship between the cost of goods sold and the retail price.

Inventory Costing

Methods used to value a company’s inventory, such as FIFO, LIFO, or weighted average cost.

Financial Statements

Summaries that detail a corporation's financial state, featuring information like the balance sheet, income statement, and cash flow statement.