[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: 2022 Retail 2021 Cost Retail Cost Beginning inventory $111,600 $180,000 488,000 3,100 6,500 $640,000 $808,000 2,800 6,000 Purchases 685,000 4,000 Purchase returns 6,400 Freight-in Net markups 5,650 4,150 525,000 14,000 1,600 9,000 6,600 645,000 14,000 2,300 Net markdowns Net sales to customers Sales to employees (net of 30% discount) Normal spoilage Price Index: January 1, 2021 December 31, 2021 December 31, 2022 1.00 1.20 1.25

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
$111,600 $180,000
488,000
3,100
6,500
Beginning inventory
$640,000 $808,000
2,800
6,000
Purchases
685,000
4,000
Purchase returns
6,400
Freight-in
Net markups
5,650
4,150
525,000
14,000
1,600
9,000
6,600
645,000
14,000
2,300
Net markdowns
Net sales to customers
Sales to employees (net of 308 discount)
Normal spoilage
Price Index:
January 1, 2021
December 31, 2021
December 31, 2022
1.00
1.20
1.25
Required:
2. Estimate the 2021 ending inventory and cost of goods sold using the average cost retail method. (Round your cost-to-retail
percentage to 2 decimal places and round your final answers to nearest whole dollar.)
Average Cost
Retail Method
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
Transcribed Image Text:Required information [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 $111,600 $180,000 488,000 3,100 6,500 Beginning inventory $640,000 $808,000 2,800 6,000 Purchases 685,000 4,000 Purchase returns 6,400 Freight-in Net markups 5,650 4,150 525,000 14,000 1,600 9,000 6,600 645,000 14,000 2,300 Net markdowns Net sales to customers Sales to employees (net of 308 discount) Normal spoilage Price Index: January 1, 2021 December 31, 2021 December 31, 2022 1.00 1.20 1.25 Required: 2. Estimate the 2021 ending inventory and cost of goods sold using the average cost retail method. (Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar.) Average Cost Retail Method Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold
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