Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the quarter ending September 30, 2021: Cost Retail Beginning inventory Net purchases Freight-in Net markups $470,000 $ 600,000 945,000 12,100 1,380,000 65,000 35,000 1,285,000 Net markdowns Net sales Estimate ending inventory and cost of goods sold (average cost). (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be
Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the quarter ending September 30, 2021: Cost Retail Beginning inventory Net purchases Freight-in Net markups $470,000 $ 600,000 945,000 12,100 1,380,000 65,000 35,000 1,285,000 Net markdowns Net sales Estimate ending inventory and cost of goods sold (average cost). (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer complete and properly
Transcribed Image Text:Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold.
The following data are available for the quarter ending September 30, 2021:
Cost
Retail
Beginning inventory
Net purchases
Freight-in
Net markups
Net markdowns
$470,000 $ 600,000
945,000
12,100
1,380,000
65,000
35,000
1,285,000
Net sales
Estimate ending inventory and cost of goods sold (average cost). (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be
entered as 12.34%.))
Transcribed Image Text:X Answer is complete but not entirely correct.
Cost-to-
Retail
Cost
Retail
Ratio
$
Beginning inventory
Plus: Net purchases
470,000
2$
600,000
945,000
1,380,000
Freight-in
12,100
Net markups
65,000
Less: Net markdowns
(35,000)
Goods available for sale
1,427,100
2,010,000
Cost-to-retail percentage
71.00%
Less: Net sales
(1,285,000)
Estimated ending inventory at retail
$
725,000
Estimated ending inventory at cost
558,750 X
Estimated cost of goods sold
$
868,350 X
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