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 CostRetail CostRetailBeginning inventory$159,250 $245,000 Purchases 450,000 631,000 $685,000 $918,000 Purchase returns 4,500 3,550 4,100 4,500 Freight-in 7,200 7,000 Net markups 5,900 11,600 Net markdowns 4,600 7,900 Net sales to customers 500,000 720,000 Sales to employees (net of 20% discount) 24,000 24,000 Normal spoilage 3,500 6,800 Price Index: January 1, 2021 1.00 December 31, 2021 1.25 December 31, 2022 1.25 Required:1. Estimate the 2021 and 2022 ending inventory and cost of goods sold using the dollar-value LIFO retail method.20212022Estimated ending inventory at retailEstimated ending inventory at costEstimated cost of goods soldRequired:2. Estimate the 2021 ending inventory and cost of goods sold using the average cost retail method. (Round your cost-to-retailpercentage to 2 decimal places and round your final answers to nearest whole dollar.)Average CostRetail MethodEstimated ending inventory at retailEstimated ending inventory at costEstimated cost of goods soldRequired:3. Estimate the 2021 ending inventory and cost of goods sold using the conventional retail method. (Round your cost-to-retailpercentage to 2 decimal places and round your final answers to nearest whole dollar.)ConventionalRetail MethodEstimated ending inventory at retailEstimated ending inventory at costEstimated cost of goods sold

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Description: 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 2

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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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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	$	159,250		$	245,000
Purchases		450,000			631,000	$	685,000	$	918,000
Purchase returns		4,500			3,550		4,100		4,500
Freight-in		7,200					7,000
Net markups					5,900				11,600
Net markdowns					4,600				7,900
Net sales to customers					500,000				720,000
Sales to employees (net of 20% discount)					24,000				24,000
Normal spoilage					3,500				6,800
Price Index:
January 1, 2021		1.00
December 31, 2021		1.25
December 31, 2022		1.25

Required:
1. Estimate the 2021 and 2022 ending inventory and cost of goods sold using the dollar-value LIFO retail method.
2021
2022
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
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
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.)
Conventional
Retail Method
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold

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