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: Net purchases Beginning inventory Freight-in Cost $ 450,000 935,000 72,800 Retail $580,000 1,360,000 63,000 33,000 1,275,000 Net markups Net markdowns Net sales Estimate ending inventory and cost of goods sold using the conventional method. Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.) Answer is complete but not entirely correct. Cost-to- Cost Retail Retail Ratio Beginning inventory $ 450,000 $ 580,000 Plus: Net purchases Freight-in Net markups Goods available for sale Less: Net markdowns 935,000 1,360,000 72,800 63,000 2,003,000 Goods available for sale Cost-to-retail percentage Less: Net sales Estimated ending inventory at retail Estimated ending inventory at cost 533,379 Estimated cost of goods sold $ 924,421 1,457,800 (33,000) 1,970,000 72.50% X (1,275,000) $ 695,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question
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:
Beginning inventory
Net purchases
Cost
$ 450,000
935,000
72,800
Retail
$ 580,000
1,360,000
63,000
33,000
1,275,000
Freight-in
Net markups
Net markdowns
Net sales
Estimate ending inventory and cost of goods sold using the conventional method.
Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.)
Beginning inventory
Plus: Net purchases
Freight-in
Net markups
Goods available for sale
Less: Net markdowns
Goods available for sale
Cost-to-retail percentage
Less: Net sales
× Answer is complete but not entirely correct.
Cost
Retail
Cost-to-
Retail
Ratio
$
450,000
935,000
$ 580,000
1,360,000
72,800
63,000
2,003,000
(33,000)
1,457,800
1,970,000
72.50% x
Estimated ending inventory at retail
Estimated ending inventory at cost
533,379 x
Estimated cost of goods sold
$
924,421 x
(1,275,000)
$ 695,000
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 at the end of the year: Beginning inventory Net purchases Cost $ 450,000 935,000 72,800 Retail $ 580,000 1,360,000 63,000 33,000 1,275,000 Freight-in Net markups Net markdowns Net sales Estimate ending inventory and cost of goods sold using the conventional method. Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.) Beginning inventory Plus: Net purchases Freight-in Net markups Goods available for sale Less: Net markdowns Goods available for sale Cost-to-retail percentage Less: Net sales × Answer is complete but not entirely correct. Cost Retail Cost-to- Retail Ratio $ 450,000 935,000 $ 580,000 1,360,000 72,800 63,000 2,003,000 (33,000) 1,457,800 1,970,000 72.50% x Estimated ending inventory at retail Estimated ending inventory at cost 533,379 x Estimated cost of goods sold $ 924,421 x (1,275,000) $ 695,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Accounting for Merchandise Inventory
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education