Question

Required information [The following information applies to the questions displayed below.) Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021 are as follows: Cost $ 94,000 364,000 9,400 7,400 Retail $184,000 584,000 Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns 1,400 16,400 12,400 3,400 8,480 544,000 10,400 4,919 The company records sales net of employee discounts. Employee discounts for 2021 totaled $4,400. Required: 2. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the conventional application (Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.)

Answer 1

solution Particulars Cost Retall 94000 184000 364000 584000 9400 Beginning Inventory Add: purchases freight in Less: purchases return Add: Net Markups Less; Abnormal spoilage (7400) (11400) 16400 (4919) (8400) 45508 764600 Cost to retall percentages 455081 = 59.51% 764600

(12400) 752200 και ΜαηΑσυνή Goods available for salez fess: Normal spollage Net sales ( 544000-10400) (3400) (533600) (4400) employees descount 210806 125447 Estimated ending Inventory at retall Estimated ending Inventory at cost [210800 X 59.51%.] Estimated cost of goods sold [455081 – 125447] 329634