On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and 2025 are as follows: Beginning inventory Purchases Purchase returns Freight-in Net markups Net markdowns Net sales to customers Sales to employees (net of 30% discount) Normal spoilage Price Index: January 1, 2024 Required: December 31, 2024 December 31, 2025 2024 2025 Cost Retail Cost Retail $ 168,750 $ 225,000 503,000 4,000 5,800 633,000 3,650 $ 665,000 3,700 5,000 $ 1,113,000 5,800 6,100 10,800 4,450 1.00 1.25 1.25 453,000 20,300 6,000 7,500 712,000 20,300 6,400 2. Estimate the 2024 ending inventory and cost of goods sold using the average cost retail method. Note: Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar. Estimated ending inventory at retail Average Cost Retail Method Estimated ending inventory at cost Estimated cost of goods sold
On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and 2025 are as follows: Beginning inventory Purchases Purchase returns Freight-in Net markups Net markdowns Net sales to customers Sales to employees (net of 30% discount) Normal spoilage Price Index: January 1, 2024 Required: December 31, 2024 December 31, 2025 2024 2025 Cost Retail Cost Retail $ 168,750 $ 225,000 503,000 4,000 5,800 633,000 3,650 $ 665,000 3,700 5,000 $ 1,113,000 5,800 6,100 10,800 4,450 1.00 1.25 1.25 453,000 20,300 6,000 7,500 712,000 20,300 6,400 2. Estimate the 2024 ending inventory and cost of goods sold using the average cost retail method. Note: Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar. Estimated ending inventory at retail Average Cost Retail Method Estimated ending inventory at cost Estimated cost of goods sold
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail,
and cost indexes for 2024 and 2025 are as follows:
Beginning inventory
Purchases
Purchase returns
Freight-in
Net markups
Net markdowns
Net sales to customers
Sales to employees (net of 30% discount)
Normal spoilage
Price Index:
January 1, 2024
Required:
December 31, 2024
December 31, 2025
2024
2025
Cost
Retail
Cost
Retail
$ 168,750 $ 225,000
503,000
4,000
5,800
633,000
3,650
$ 665,000
3,700
5,000
$ 1,113,000
5,800
6,100
10,800
4,450
1.00
1.25
1.25
453,000
20,300
6,000
7,500
712,000
20,300
6,400
2. Estimate the 2024 ending inventory and cost of goods sold using the average cost retail method.
Note: Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar.
Estimated ending inventory at retail
Average Cost Retail
Method
Estimated ending inventory at cost
Estimated cost of goods sold
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