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: Beginning inventory Purchases Purchase returns Freight-in Net markups Net markdowns Net sales to customers Sales to employees (net of 20% discount) Normal spoilage Price Index: 2021 Cost Retail $140,000 $200,000 440,000 594,000 4,350 3,500 6,600 5,450 4,300 480,000 19,200 2,900 Cost 2022 Retail $680,000 $854,000 3,200 4,550 5,000 9,800 7,000 702,000 19, 200 4,000
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: Beginning inventory Purchases Purchase returns Freight-in Net markups Net markdowns Net sales to customers Sales to employees (net of 20% discount) Normal spoilage Price Index: 2021 Cost Retail $140,000 $200,000 440,000 594,000 4,350 3,500 6,600 5,450 4,300 480,000 19,200 2,900 Cost 2022 Retail $680,000 $854,000 3,200 4,550 5,000 9,800 7,000 702,000 19, 200 4,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
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:
Beginning inventory
Purchases
Purchase returns
Freight-in
Net markups
Net markdowns
Net sales to customers
Sales to employees (net of 20% discount)
Normal spoilage
Price Index:
January 1, 2021
December 31, 2021
December 31, 2022
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
$
2021
283,900
2021
2022
Cost Retail
$140,000 $200,000
440,000 594,000
3,500 4,350
6,600
1.00
1.25
1.25
5,450
4,300
480,000
19, 200
2,900
Cost
Required:
1. Estimate the 2021 and 2022 ending inventory and cost of goods sold using the dollar-value LIFO retail method.
2022
Retail
$680,000 $854,000
3,200
4,550
5,000
9,800
7,000
702,000
19, 200
4,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc010707c-ef5e-4dc9-9402-90a4d2eb2d16%2F8bd443a9-c636-4064-aec9-a2699d78a852%2F0sxvoop_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
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:
Beginning inventory
Purchases
Purchase returns
Freight-in
Net markups
Net markdowns
Net sales to customers
Sales to employees (net of 20% discount)
Normal spoilage
Price Index:
January 1, 2021
December 31, 2021
December 31, 2022
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
$
2021
283,900
2021
2022
Cost Retail
$140,000 $200,000
440,000 594,000
3,500 4,350
6,600
1.00
1.25
1.25
5,450
4,300
480,000
19, 200
2,900
Cost
Required:
1. Estimate the 2021 and 2022 ending inventory and cost of goods sold using the dollar-value LIFO retail method.
2022
Retail
$680,000 $854,000
3,200
4,550
5,000
9,800
7,000
702,000
19, 200
4,000
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