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$460,000 $590,000 Net purchases 940,000 1,370,000 Freight-in 52,700 Net markups 64,000 Net markdowns 34,000 Net sales 1,280,000 Estimate ending inventory and cost of goods sold using the conventional method. Beginning inventoryPlus: Net purchasesFreight-inNet markupsGoods available for saleLess: Net markdownsGoods available for saleCost-to-retail percentageLess: Net salesEstimated ending inventory at retailEstimated ending inventory at costEstimated cost of goods soldCost$ 460,000 $ 590,000940,0001,370,00052,7001,452,700Retail$64,0002,024,000(34,000)1,990,000(1,280,000)710,000Cost-to-RetailRatio

Name: Kiddie World uses a periodic inventory system and the retail inventory
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Description: 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$460,000 $59

Retail inventory method : It is a method for estimating ending inventory based on the ratio of…

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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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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	$	460,000		$	590,000
Net purchases		940,000			1,370,000
Freight-in		52,700
Net markups					64,000
Net markdowns					34,000
Net sales					1,280,000

Estimate ending inventory and cost of goods sold using the conventional method.

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
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
Cost
$ 460,000 $ 590,000
940,000
1,370,000
52,700
1,452,700
Retail
$
64,000
2,024,000
(34,000)
1,990,000
(1,280,000)
710,000
Cost-to-Retail
Ratio

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