On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at...
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Accounting
On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and 2025 are as follows:
2024
2025
Cost
Retail
Cost
Retail
Beginning inventory
$ 168,750
$ 225,000
Purchases
503,000
633,000
$ 665,000
$ 1,113,000
Purchase returns
4,000
3,650
3,700
5,800
Freight-in
5,800
5,000
Net markups
6,100
10,800
Net markdowns
4,450
7,500
Net sales to customers
453,000
712,000
Sales to employees (net of 30% discount)
20,300
20,300
Normal spoilage
6,000
6,400
Price Index:
January 1, 2024
1.00
December 31, 2024
1.25
December 31, 2025
1.25
Required:
2. Estimate the 2024 ending inventory and cost of goods sold using the average cost retail method.
Note: Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar.
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