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On January 1, 2018, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at...

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Accounting

On January 1, 2018, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2018 and 2019 are as follows:

2018 2019
Cost Retail Cost Retail
Beginning inventory $ 162,500 $ 250,000
Purchases 800,000 1,084,000 $ 680,000 $ 1,063,000
Purchase returns 7,000 12,150 2,000 4,300
Freight-in 12,500 2,000
Net markups 6,900 11,800
Net markdowns 4,750 8,000
Net sales to customers 950,000 722,000
Sales to employees (net of 25% discount) 22,500 22,500
Normal spoilage 4,200 6,900
Price Index:
January 1, 2018 1.00
December 31, 2018 1.25
December 31, 2019 1.25

Required: 1. Estimate the 2018 and 2019 ending inventory and cost of goods sold using the dollar-value LIFO retail method.

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