Estimated ending inventory at retail Estimated ending inventory at cost Average cost application Estimated cost of goods sold
Estimated ending inventory at retail Estimated ending inventory at cost Average cost application Estimated cost of goods sold
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2024
are as follows:
Cost
Retail
Beginning inventory
Purchases
Freight-in
Purchase returns
Net markups
Net markdowns
Normal spoilage
Abnormal spoilage
Sales
Sales returns
$ 88,000
$ 178,000
356,000
578,000
8,800
6,800
10,800
15,800
11,800
2,800
4,867
7,800
538,000
9,800
The company records sales net of employee discounts. Employee discounts for 2024 totaled $3,800.
Required:
1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the average cost
application.
Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
Average cost
application](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdcfb0428-8e62-41c8-9d2b-3e4003f8af75%2F23c7c1fb-a9d9-45b0-88c7-9e5cc99a651a%2F9zqu49_processed.png&w=3840&q=75)
Transcribed Image Text: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 2024
are as follows:
Cost
Retail
Beginning inventory
Purchases
Freight-in
Purchase returns
Net markups
Net markdowns
Normal spoilage
Abnormal spoilage
Sales
Sales returns
$ 88,000
$ 178,000
356,000
578,000
8,800
6,800
10,800
15,800
11,800
2,800
4,867
7,800
538,000
9,800
The company records sales net of employee discounts. Employee discounts for 2024 totaled $3,800.
Required:
1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the average cost
application.
Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
Average cost
application
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