Question
[The following information applies to the questions displayed below.] Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold.
[The following information applies to the questions displayed below.] Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021 are as follows:
Cost | Retail | |||||
Beginning inventory | $ | 81,000 | $ | 171,000 | ||
Purchases | 375,000 | 571,000 | ||||
Freight-in | 8,100 | |||||
Purchase returns | 6,100 | 10,100 | ||||
Net markups | 15,100 | |||||
Net markdowns | 11,100 | |||||
Normal spoilage | 2,100 | |||||
Abnormal spoilage | 4,322 | 7,100 | ||||
Sales | 531,000 | |||||
Sales returns | 9,100 | |||||
The company records sales net of employee discounts. Employee discounts for 2021 totaled $3,100.
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 Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.)
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