What is the estimated ending inventory using average cost approach?What is the cost of goods sold using FIFO cost approach? CostRetailInventory, Jan 1PurchasesFreight-in8,70055,3002,00050014,00080,300Purchase DiscountsPurchase Returns5,2001,0008008,6001,5001,200Departmental Transfer – InDepartmental Transfer - OutMark-upMark-up CancellationMarkdown6,0002,00012,0003,0007,00043,8002,5001,000500Markdown CancellationAbnormal Spoilage5,000SalesSales ReturnsSales DiscountEmployee DiscountNormal Spoilage200

Net Markups =[Mark-up]-[Mark-up Cancellation] =6,000-2,000…

Cost Retail Inventory, Jan 1 Purchases Freight-in Purchase Discounts 8,700 55,300 2,000 14,000 80,300 500 Purchase Returns 5,200 1,000 8,600 1,500 1,200 Departmental Transfer – In Departmental Transfer - Out Mark-up Mark-up Cancellation Markdown 800 6,000 2,000 12,000 3,000 7,000 43,800 2,500 1,000 500 Markdown Cancellation Abnormal Spoilage Sales Sales Returns 5,000 Sales Discount Employee Discount Normal Spoilage 200 l....... .

Cost Retail Inventory, Jan 1 Purchases Freight-in Purchase Discounts 8,700 55,300 2,000 14,000 80,300 500 Purchase Returns 5,200 1,000 8,600 1,500 1,200 Departmental Transfer – In Departmental Transfer - Out Mark-up Mark-up Cancellation Markdown 800 6,000 2,000 12,000 3,000 7,000 43,800 2,500 1,000 500 Markdown Cancellation Abnormal Spoilage Sales Sales Returns 5,000 Sales Discount Employee Discount Normal Spoilage 200 l....... .

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

What is the estimated ending inventory using average cost approach?
What is the cost of goods sold using FIFO cost approach?

Cost
Retail
Inventory, Jan 1
Purchases
Freight-in
8,700
55,300
2,000
500
14,000
80,300
Purchase Discounts
Purchase Returns
5,200
1,000
800
8,600
1,500
1,200
Departmental Transfer – In
Departmental Transfer - Out
Mark-up
Mark-up Cancellation
Markdown
6,000
2,000
12,000
3,000
7,000
43,800
2,500
1,000
500
Markdown Cancellation
Abnormal Spoilage
5,000
Sales
Sales Returns
Sales Discount
Employee Discount
Normal Spoilage
200

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