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 at the end of the year: Cost Retail Beginning inventory $ 300,000 $ 450,000 Net purchases 861,000 1,210,000 Freight-in 22,000 Net markups 48,000 Net markdowns 18,000 Net sales 1,200,000 Estimate ending inventory and cost of goods sold (average cost). Cost-to-retail percentage Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.) Cost Retail Cost-to-Retail Ratio Beginning inventory $300,000 $450,000 Plus: Net purchases 861,000 1,210,000 Freight-in 22,000 Net markups 48,000 Less: Net markdowns (18,000) Goods available for sale 1,183,000 1,690,000 Cost-to-retail percentage 70.45% incorrect Less: Net sales (1,200,000) Estimated ending inventory at retail $490,000 Estimated ending inventory at cost 421,000 answer incorrect Estimated cost of goods sold $1,229,000 answer incorrect
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 at the end of the year: Cost Retail Beginning inventory $ 300,000 $ 450,000 Net purchases 861,000 1,210,000 Freight-in 22,000 Net markups 48,000 Net markdowns 18,000 Net sales 1,200,000 Estimate ending inventory and cost of goods sold (average cost). Cost-to-retail percentage Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.) Cost Retail Cost-to-Retail Ratio Beginning inventory $300,000 $450,000 Plus: Net purchases 861,000 1,210,000 Freight-in 22,000 Net markups 48,000 Less: Net markdowns (18,000) Goods available for sale 1,183,000 1,690,000 Cost-to-retail percentage 70.45% incorrect Less: Net sales (1,200,000) Estimated ending inventory at retail $490,000 Estimated ending inventory at cost 421,000 answer incorrect Estimated cost of goods sold $1,229,000 answer incorrect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 at the end of the year:
| Cost | Retail | |
|---|---|---|
| Beginning inventory | $ 300,000 | $ 450,000 |
| Net purchases | 861,000 | 1,210,000 |
| Freight-in | 22,000 | |
| Net markups | 48,000 | |
| Net markdowns | 18,000 | |
| Net sales | 1,200,000 |
Estimate ending inventory and cost of goods sold (average cost). Cost-to-retail percentage
Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.)
| Cost | Retail | Cost-to-Retail Ratio | |
| Beginning inventory | $300,000 | $450,000 | |
| Plus: Net purchases | 861,000 | 1,210,000 | |
| Freight-in | 22,000 | ||
| Net markups | 48,000 | ||
| Less: Net markdowns | (18,000) | ||
| Goods available for sale | 1,183,000 | 1,690,000 | |
| Cost-to-retail percentage | 70.45% incorrect | ||
| Less: Net sales | (1,200,000) | ||
| Estimated ending inventory at retail | $490,000 | ||
| Estimated ending inventory at cost | 421,000 answer incorrect | ||
| Estimated cost of goods sold | $1,229,000 answer incorrect |
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