Question
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2016 are as follows: Cost Retail Beginning
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2016 are as follows: Cost Retail Beginning inventory $ 92,000 $ 182,000 Purchases 360,000 582,000 Freight-in 9,200 Purchase returns 7,200 11,200 Net markups 16,200 Net markdowns 12,200 Normal spoilage 3,200 Abnormal spoilage 4,840 8,200 Sales 542,000 Sales returns 10,200 The company records sales net of employee discounts. Discounts for 2016 totaled $4,200. Required: 1. Estimate Sparrows ending inventory and cost of goods sold for the year using the retail inventory method and the average cost application. (Round your cost-to-retail percentage calculation to 2 decimal places.) 2. Estimate Sparrows ending inventory and cost of goods sold for the year using the retail inventory method and the conventional application. (Round your cost-to-retail percentage calculation to 2 decimal places.)
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