Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021 are as follows: Cost Retail $ 80,000 $170,000 347,000 8,000 6,000 Beginning inventory Purchases 570,000 Freight-in 10,000 15,000 11,000 2,000 7,000 530,000 9,000 Purchase returns Net markupa Net markdovns Normal spoilage Abnornal spoilage Sales Sales returns 3,705 The company records sales net of employee discounts. Employee discounts for 2021 totaled $3,000. 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. (Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.)

Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021 are as follows: Cost Retail $ 80,000 $170,000 347,000 8,000 6,000 Beginning inventory Purchases 570,000 Freight-in 10,000 15,000 11,000 2,000 7,000 530,000 9,000 Purchase returns Net markupa Net markdovns Normal spoilage Abnornal spoilage Sales Sales returns 3,705 The company records sales net of employee discounts. Employee discounts for 2021 totaled $3,000. 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. (Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.)

Name: Sparrow Company uses the retail inventory method to estimate ending i
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021are as follows:CostRetail$ 80,000347,0008,0006,000Beginning inventoryPurchases$170,000570,000Freight-in10, 0০০15,00011,0002,0007,00053

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Adams Corporation uses a periodic inventory system and the retail inventory method to estimate…

Q: Sejz Company used perpetual inventory system to record inventory transactions for 2021. P1,900,000…

A: Inventory is one of the important current asset of the business. It includes inventory of raw…

Q: 2. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail…

A: The ending inventory as per the retail method is one of the estimations which are used to determine…

Q: stimating Inventory Using Retail Inventory Method—Conventional Outlet Store applies the…

A: It is the amount of stock that remains unsold at the end of the year. It is also known as the Ending…

Q: Sunland Hardware reported cost of goods sold as follows. 2021 2022 Beginning Inventory $23,000…

A: Ending inventory for 2021 will have impact on the beginning inventory of 2022 as well. So the Ending…

Q: Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods…

A: (1) Compute the Sparrow's ending inventory and cost of goods sold using the retail inventory method…

Q: Che Smith-Kline Company maintains inventory records at selling prices as well as at cost. For 2024,…

A: In the given, we are going to calculate the cost of ending inventory by using the average cost…

Q: Prepare a formal labeled schedule computing the cost of inventory at 31 December

A: Meaning of Year- end Inventory Year-end inventory is also called as closing inventory. Closing…

Q: Based on the following data, estimate the cost of ending merchandise inventory using the gross…

A: Cost of goods sold = Sales (net) - gross profit (35% of sales) Cost of goods sold = $729,000 -…

Q: The inventory and purchases data of UNIWIDE Company for the last quarter of 2021 are as follows:…

A: Under FIFO method the oldest products in inventory have been sold first.

Q: Wildhorse Co. accumulates the following cost and market data at December 31. Inventory Categories…

A: Lets understand the basics. As per IAS 2 "Inventory, inventory should be valued at lower of cost or…

Q: What is the amount of ending inventory at Retail on June 30, 2023? [A] 1,180,000 [B] 880,000 [C]…

A: Ending inventory is also known as closing inventory which is left with the company at the end of a…

Q: Marigold Inc. uses the retail inventory method to estimate ending inventory for its monthly…

A: Inventory valuationIn accounting, inventory is also known as stock. Inventory means all the finished…

Q: the following Information: Merchandise inventory, January 1, 2024 Net purchases Net markups Net…

A: In LIFO method, last inventories are used first. LIFO is the method to calcule ending inventory…

Q: Plank Co. uses the retail inventory method. The following information is available for the current…

A: ParticulersCostRetailBeginning Inventory$312,000$488,000Purchases$1,180,000$1,660,000Frieght…

Q: The following data were extracted from the accounting records of Harkins Company for the year ended…

A: a.Calculate the cost of goods sold of Company H.

Q: Compute the missing amounts. Input your answers as positive numbers.

A: Calculate cost of goods sold for 2019 (c) as shown below: Cost of goods sold = Net sales - Gross…

Q: Taylor Company uses a periodic inventory system. The following is partial information from its…

A: Beginning inventory = Cost of goods sold + Ending inventory - (Purchases - Purchase returns) Gross…

Q: Given the following, calculate the estimated cost of ending inventory using the gross profit method.…

A: Ending inventory = Cost of goods available for sale - Cost of goods sold Cost of goods sold = Sales…

Q: Charleston Company has elected to use the dollar-value LIFO retail method to value its inventory.…

A: The ending inventory is the inventory left in stock at year end and assumed to be sold during next…

Q: Lance-Hefner Specialty Shoppes decided to use the dollar-value LIFO retail method to value its…

A: Step 1: Calculation of Ending Inventory at retail The formula in calculating ending inventory at…

Q: Data below for the year ended December 31, 2024, relates to Houdini Incorporated Houdini started…

A: The entire worth of goods and products that a company has on hand and on the market at the end of an…

Q: Rally Wheels, Inc. had the following balances and transactions during 2024: Beginning Merchandise…

A: Under LIFO method the newest products in inventory have been sold first.

Q: Estimate the ending inventory as of December 31, 2024. Estimated ending inventory at retail…

A: At first we need to compute the cost to retail percentage for Billingsly Products. Ending inventory…

Q: Presented below is information related to Mantle Company. Cost Retail Beginning inventory $…

A: Net markup = $23,750 - $3,750 = $20,000 Net markdown = $8,750 - $1,250 = $7,500 Cost Retail…

Q: Sheffield Corp. accumulates the following cost and market data at December 31. Inventory…

A: Under the lower-of-cost-or-net realizable value method, the lower amount is taken for the individual…

Q: Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending…

A: Retail inventory method :It is a method for estimating ending inventory based on the ratio of amount…

Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

Topic Video

Question

Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021
are as follows:
Cost
Retail
$ 80,000
347,000
8,000
6,000
Beginning inventory
Purchases
$170,000
570,000
Freight-in
10, 0০০
15,000
11,000
2,000
7,000
530,000
9,000
Purchase returna
Net markups
Net markdowns
Normal spoilage
Abnormal spoilage
Sales
3,705
Sales returns
The company records sales net of employee discounts. Employee discounts for 2021 totaled $3,000.
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. (Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.)
Answer is not complete.
Average cost
application
Estimated ending inventory at retail
201,000
Estimated ending inventory at cost
Estimated cost of goods sold

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

ane Help Tatum Company has four products in Its inventory. Information about the December 31, 2021, inventory is as follows: Product 101 102 103 104 Total Cost $134,000 97,000 67,000 37,000 Total Net Realizable Value $107,000 117,000 57,000 57,000 Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to Individual products. Inventory Value Product Cost NRV 101 134,000 $ 107,000 97,000 117,000 102 67,000 57,000 103 57,000 37,000 335,000 104 0. S. Required 2 > Next > Prev 1.of 9 %24 %24
Exit Marilee's Electronics uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold, The following data is available from the company records for the month of June 2021: Cost Retail Beginning inventory Net purchases Net markups Net markdowns Net sales $ 82,500 $131, 000 505,000 269,000 25,500 36,000 525, 000 The average cost-to-retail percentage is: Muitipte Choice O 56.0%. < Prev 15 of 15 Next
ABC company has the following information is available for June 2019: Cost Retail $ 60,000 $ 100,000 Inventory, 1 June Purchases 270,000 350,000 Purchase returns 2,500 1,500 Freight-in 5,500 Net markups 9,500 Net markdowns 16,000 Sales 400,000 Sales discount 3,500 If ABC company uses the cost method to determine its ending inventory at cost. what is the cost to retail ratio?
Meman
Royall Sales Company uses the retail inventory method to value its merchandise inventory. The following information is available for the current year: Cost Retail Beginning inventory $30,000 $45,000 Purchases 190,000 260,000 Freight-in 2,500 — Net markups — 8,500 Net markdowns — 10,000 Employee discounts — 1,000 Sales revenue — 205,000 The ending inventory under Conventional Retail Inventory Method is = The ending inventory under Cost Method of Retail Inventory Method is =
Calculate the ending inventory at cost using the retail method (round cost-to-retail ratio to 2 decimals and final answer to 0 decimals). Keep in mind the ending inventory at October 31, 2023, at retail prices, is $82, 600.
es 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 ormal spoilage Sales Sales returns Cost $ 97,000 363,000 9,700 7,700 Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold 5,546 Retail $ 187,000 587,000 11,700 16,700 12,700 3,700 8,700 547,000 10,700 The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,700. 2. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the conventional application. Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount. Conventional application
Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory is as follows: Total Net Product Total Cst Realizable Value 101 102 $148,000 104,000 74,000 $114,000 124,000 64,000 64,000 103 104 44,000 Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or net realizable value (LCNRV) rule is applied to individual products. Inventory Value Product Cost NRV 101 2$ 148,000 114,000 $114,000 102 104,000 124,000 104,000 103 74,000 64,000 66,000 X 104 44,000 64,000 44,000 370,000 $ 328,000