|
Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the quarter ending September 30, 2013: |
| Cost | Retail | |||||
| Beginning inventory | $ | 450,000 | $ | 580,000 | ||
| Net purchases | 935,000 | 1,360,000 | ||||
| Freight in | 72,800 | |||||
| Net markups | 63,000 | |||||
| Net markdowns | 33,000 | |||||
| Net sales | 1,275,000 | |||||
|
|
||||||
|
Estimate ending inventory and cost of goods sold using the conventional method (average cost and the LCM approximation). (Round ratio calculation to 2 decimal places.) |
CostRetailCost to Retail RatioBeginning inventory Plus: Net purchases Freight inNet markupsGoods available for sale Less: Net markdowns Goods available for saleCost to retail percentageLess: Net sales Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold