On January 1, 2021, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows: 2021 2022 Cost Retail Cost Retail Beginning inventory $ 165,000 $ 220,000 Purchases 690,000 888,000 $ 680,000 $ 1,069,000 Purchase returns 4,500 5,150 2,000 4,075 Freight-in 4,800 5,600 Net markups 6,600 10,600 Net markdowns 4,450 7,400 Net sales to customers 640,000 710,000 Sales to employees (net of 25% discount) 21,000 21,000 Normal spoilage 3,800 2,000 Price Index: January 1, 2021 1.00 December 31, 2021 1.25 December 31, 2022 1.25 Required: 3. Estimate the 2021 ending inventory and cost of goods sold using the conventional retail method.
On January 1, 2021, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows: 2021 2022 Cost Retail Cost Retail Beginning inventory $ 165,000 $ 220,000 Purchases 690,000 888,000 $ 680,000 $ 1,069,000 Purchase returns 4,500 5,150 2,000 4,075 Freight-in 4,800 5,600 Net markups 6,600 10,600 Net markdowns 4,450 7,400 Net sales to customers 640,000 710,000 Sales to employees (net of 25% discount) 21,000 21,000 Normal spoilage 3,800 2,000 Price Index: January 1, 2021 1.00 December 31, 2021 1.25 December 31, 2022 1.25 Required: 3. Estimate the 2021 ending inventory and cost of goods sold using the conventional retail method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1, 2021, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows:
| 2021 | 2022 | ||||||||||||
| Cost | Retail | Cost | Retail | ||||||||||
| Beginning inventory | $ | 165,000 | $ | 220,000 | |||||||||
| Purchases | 690,000 | 888,000 | $ | 680,000 | $ | 1,069,000 | |||||||
| Purchase returns | 4,500 | 5,150 | 2,000 | 4,075 | |||||||||
| Freight-in | 4,800 | 5,600 | |||||||||||
| Net markups | 6,600 | 10,600 | |||||||||||
| Net markdowns | 4,450 | 7,400 | |||||||||||
| Net sales to customers | 640,000 | 710,000 | |||||||||||
| Sales to employees (net of 25% discount) | 21,000 | 21,000 | |||||||||||
| Normal spoilage | 3,800 | 2,000 | |||||||||||
| Price Index: | |||||||||||||
| January 1, 2021 | 1.00 | ||||||||||||
| December 31, 2021 | 1.25 | ||||||||||||
| December 31, 2022 | 1.25 | ||||||||||||
Required:
3. Estimate the 2021 ending inventory and cost of goods sold using the conventional retail method. (Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar.)
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