Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods
P 9-4 Retail inventory method; various cost methods. Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods
ANSWER KEY P 9-4 Retail inventory method; various cost methods. Sparrow Company uses the
P 9-4 Sparrow Company
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2011 are as follows:
Cost Retail
Beginning inventory $90,000 $180,000
Purchases 355,000 580,000
Freight-in 9,000
Purchase returns 7,000 11,000
Net mark-ups 16,000
Net markdowns 12,000
Normal spoilage 3,000
Abnormal spoilage 4,800 8,000
Sales 540,000
Sales returns 10,000
The company records sales net of employee discounts. Discounts for 2011 totaled $4,000.
Required:
Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the following applications:
1. Average cost
2. Conventional (average, LCM)CLICK HERE FOR THE SOLUTION
