On January 1, 2021, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at...
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Accounting
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
$
111,600
$
180,000
Purchases
488,000
685,000
$
640,000
$
808,000
Purchase returns
3,100
4,000
2,800
6,400
Freight-in
6,500
6,000
Net markups
5,650
9,000
Net markdowns
4,150
6,600
Net sales to customers
525,000
645,000
Sales to employees (net of 30% discount)
14,000
14,000
Normal spoilage
1,600
2,300
Price Index:
1-Jan-21
1
31-Dec-21
1.2
31-Dec-22
1.25
Estimate the 2021 and 2022 ending inventory and cost of goods sold using the dollar-value LIFO retail method.
2021
2022
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated costs of goods sold
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