P9-4

sparrow company uses the retail inventory method to estimate ending inventory and cost of goods sold. data for 2016 are as follows

cost retail

begining inventory 90,000 180,000

purchases 355,000 580,000

frieght in 9,000

purchase returns 7,000 11,000

net markups 16,000

net markdowns 12,000

normal spoilage 3,000

abnormal spoilage 4,800 8,000

sales 540,000

ssales returns 10,000

the company records sales net of employee discounts. Discounts for 2016 totaled 4,000

Required

estimate sparrows ending inventory and cost of goods sold for the year using the retail inventory method and the following aplications:

1. Average cost

2. Conventional