! Required information [The following information applies to the questions displayed below.] Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2024 are as follows: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns Cost $ 95,000 Retail $ 185,000 359,000 585,000 9,500 7,500 11,500 16,500 12,500 3,500 4,354 8,500 545,000 10,500 The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,500. Required: 1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the average cost application. Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 13E: Retail Inventory Method The following information relates to the retail inventory method used by...
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Required information
[The following information applies to the questions displayed below.]
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold.
Data for 2024 are as follows:
Beginning inventory
Purchases
Freight-in
Purchase returns
Net markups
Net markdowns
Normal spoilage
Abnormal spoilage
Sales
Sales returns
Cost
$ 95,000
Retail
$ 185,000
359,000
585,000
9,500
7,500
11,500
16,500
12,500
3,500
4,354
8,500
545,000
10,500
The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,500.
Required:
1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the
average cost application.
Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.
Transcribed Image Text:! Required information [The following information applies to the questions displayed below.] Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2024 are as follows: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns Cost $ 95,000 Retail $ 185,000 359,000 585,000 9,500 7,500 11,500 16,500 12,500 3,500 4,354 8,500 545,000 10,500 The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,500. Required: 1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the average cost application. Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.
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