Problem 9-13 (Algo) Retail inventory method; various applications [LO9-3, 9-4, 9-5] Skip to question [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: 2021 2022 Cost Retail Cost Retail Beginning inventory $ 162,500 $ 250,000 Purchases 800,000 1,084,000 $ 680,000 $ 1,063,000 Purchase returns 7,000 12,150 2,000 4,300 Freight-in 12,500 2,000 Net markups 6,900 11,800 Net markdowns 4,750 8,000 Net sales to customers 950,000 722,000 Sales to employees (net of 25% discount) 22,500 22,500 Normal spoilage 4,200 6,900 Price Index: January 1, 2021 1.00 December 31, 2021 1.25 December 31, 2022 1.25 Problem 9-13 (Algo) Part 3 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 9-13 (Algo) Retail inventory method; various applications [LO9-3, 9-4, 9-5]

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[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:

	2021		2022
	Cost	Retail		Cost	Retail
Beginning inventory	$	162,500		$	250,000
Purchases		800,000			1,084,000	$	680,000	$	1,063,000
Purchase returns		7,000			12,150		2,000		4,300
Freight-in		12,500					2,000
Net markups					6,900				11,800
Net markdowns					4,750				8,000
Net sales to customers					950,000				722,000
Sales to employees (net of 25% discount)					22,500				22,500
Normal spoilage					4,200				6,900
Price Index:
January 1, 2021		1.00
December 31, 2021		1.25
December 31, 2022		1.25

Problem 9-13 (Algo) Part 3

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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