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 $ 91,000 356,000 9,100 7,100 4,654 Retail $ 181,000 581,000 11,100 16,100 12,100 3,100 8,100 541,000 10,100 The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,100.
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 $ 91,000 356,000 9,100 7,100 4,654 Retail $ 181,000 581,000 11,100 16,100 12,100 3,100 8,100 541,000 10,100 The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,100.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text: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
$ 91,000
356,000
9,100
7,100
12, 100
3,100
8,100
541,090
10,100
The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,100.
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold i
4,654
Retail
$ 181,000.
581,000
11,100
16,100
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
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