Chapter 9, Problem 9.7BE

Retail inventory method; average cost

• LO9–3

Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the quarter ending September 30, 2018:

	Cost	Retail
Beginning inventory	$300,000	$450,000
Net purchases	861,000	1,210,000
Freight-in	22,000
Net markups		48,000
Net markdowns		18,000
Net sales		1,200,000

Estimate ending inventory and cost of goods sold (average cost).