Answer
The advantages of the retail method over cost methods include:
1. Losses due to fire or another casualty are readily determined.
2. Approximate inventory values can be determined without maintaining perpetual inventory records.
3. The preparation of interim financial statements is facilitated.
4. Clerical work in pricing the physical inventory is reduced.
5. The cost of merchandise can be kept confidential in intracompany transfers.
Work Step by Step
Accountants should be carefully review how the above factors affects them and stakeholders.
