Question

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On January 1, 2021, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows:

	2021							2022
	Cost			Retail				Cost			Retail
Beginning inventory	$	90,000		$	150,000
Purchases		478,000			730,000			$	511,000		$	760,000
Purchase returns		2,500			3,500				2,200			4,000
Freight-in		6,960							8,000
Net markups					8,500							10,000
Net markdowns					4,000							6,000
Net sales to customers					650,000							680,000
Sales to employees (net of 30% discount)					14,000							17,500
Normal spoilage					5,000							6,600
Price Index:
January 1, 2021		1.00
December 31, 2021		1.03
December 31, 2022		1.06

Required:
2. Estimate the 2021 ending inventory and cost of goods sold using the average cost retail method. (Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar.)

Average Cost Retail Method Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold

Answer 1

PageNoo Anster Ending inventoong and cost of good ş şold using Average Coşi sulaid method. cost Retail Beginning inventory $90,000 $150,000 Add: Purchal as $448,000 $430,000 Add: Freight in $6960 $2.500) 443 500) $8500 (4000) Goods available for Sale $542,460$881,000 Leşş: Purchase returns Add: Net markups Leşş: Net markdown cost to retail percentage (542460 1881000) = 64.98% Less: Nogmaal $poilage Teşş: Net Aşşetę Net fales to Cullomery_$650,000 ($5000) sales to employees $14,000 Employee diş counts $6,000 Eştimated Ending inventory al retail Eştimoded Ending inventory of cost $206000*64:98%. 1.-133858.8 Estimated cost of goods şold $439 601-7 ($640,000) $206,000

Pageno@ Emploge discount = sales if no employee discount - sales to employees Pales if no emplopee discount = 14000 0.70 = $20,000 Employee discovent = $20,000 $4,000 = $6,000