Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2016 are as follows:

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

Cost Retail Beginning inventory 90,000 $180,000 355,000 580,000 Purchases Freight-in 9,000 Purchase returns 7,000 11.000 16,000 Net markups 12,000 Net markdowns 3,000 Normal spoilage 8,000 4,800 Abnormal spoilage Sales 540,000 10,000 Sales returns