On January 1, 2021, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows: 2021 2022 CostRetail CostRetailBeginning inventory$165,000 $220,000 Purchases 690,000 888,000 $680,000 $1,069,000 Purchase returns 4,500 5,150 2,000 4,075 Freight-in 4,800 5,600 Net markups 6,600 10,600 Net markdowns 4,450 7,400 Net sales to customers 640,000 710,000 Sales to employees (net of 25% discount) 21,000 21,000 Normal spoilage 3,800 2,000 Price Index: January 1, 2021 1.00 December 31, 2021 1.25 December 31, 2022 1.25 Required:3. Estimate the 2021 ending inventory and cost of goods sold using the conventional retail method. (Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar.)

The retail inventory method treats the finances of a small business as inventory rather than…

Answered: On January 1, 2021, Pet Friendly Stores…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 14RE: On January 1 of Year 1, Dorso Company adopted the dollar-value LIFO method of inventory costing....

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On January 1, 2021, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows:

	2021		2022
	Cost	Retail		Cost	Retail
Beginning inventory	$	165,000		$	220,000
Purchases		690,000			888,000	$	680,000	$	1,069,000
Purchase returns		4,500			5,150		2,000		4,075
Freight-in		4,800					5,600
Net markups					6,600				10,600
Net markdowns					4,450				7,400
Net sales to customers					640,000				710,000
Sales to employees (net of 25% discount)					21,000				21,000
Normal spoilage					3,800				2,000
Price Index:
January 1, 2021		1.00
December 31, 2021		1.25
December 31, 2022		1.25

Required:
3. Estimate the 2021 ending inventory and cost of goods sold using the conventional retail method. (Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar.)

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