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Normal spoilage

Normal spoilage

FINANCIAL ACCOUNTING
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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Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns Part 2 355,000 580,000 9,000 7,000 4,800 Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,000. 11,000 16,000 12,000 3,000 8,000 540,000 10,000 2. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the conventional application. Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount. Conventional application
Transcribed Image Text:Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns Part 2 355,000 580,000 9,000 7,000 4,800 Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,000. 11,000 16,000 12,000 3,000 8,000 540,000 10,000 2. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the conventional application. Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount. Conventional application
Grand Department Store, Incorporated, uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October: Beginning inventory: At cost At retail Purchases (exclusive of freight and returns): At cost At retail Freight-in Purchase returns: At cost At retail Additional markups Markup cancellations Markdowns (net) Normal spoilage and breakage Sales Sales returns $ 20,000 30,000 100,151 146,495 5,100 2,100 2,800 2,500 265 800 4,500 140,000 4,270 Rec 1. Using the conventional retail ending inventory method, prepare a schedule computing estimated lower of cost or market (LCM) inventory and cost of goods sold for October.
Transcribed Image Text:Grand Department Store, Incorporated, uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October: Beginning inventory: At cost At retail Purchases (exclusive of freight and returns): At cost At retail Freight-in Purchase returns: At cost At retail Additional markups Markup cancellations Markdowns (net) Normal spoilage and breakage Sales Sales returns $ 20,000 30,000 100,151 146,495 5,100 2,100 2,800 2,500 265 800 4,500 140,000 4,270 Rec 1. Using the conventional retail ending inventory method, prepare a schedule computing estimated lower of cost or market (LCM) inventory and cost of goods sold for October.
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adjustments are to ensure that the company follows the accrual method of accounting system, instead of a cash basis. These adjustments primarily relate to the expenses incurred during the period, rather than the time of payment of cash.

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