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 at the end of the year:Beginning inventoryNet purchasesCost$ 450,000935,00072,800Retail$ 580,0001,360,00063,00033,0001,275,000Freight-inNet markupsNet markdownsNet salesEstimate ending inventory and cost of goods sold using the conventional method.Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.)Beginning inventoryPlus: Net purchasesFreight-inNet markupsGoods available for saleLess: Net markdownsGoods available for saleCost-to-retail percentageLess: Net sales× Answer is complete but not entirely correct.CostRetailCost-to-RetailRatio$450,000935,000$ 580,0001,360,00072,80063,0002,003,000(33,000)1,457,8001,970,00072.50% xEstimated ending inventory at retailEstimated ending inventory at cost533,379 xEstimated cost of goods sold$924,421 x(1,275,000)$ 695,000

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Description: 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 at the end of the year:Beginning inventoryNet purchasesCost$ 450,000935,00072,800Retai

Under the retail inventory method, a retailer assumes that there exists some observable pattern…

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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 at the end of the year: Net purchases Beginning inventory Freight-in Cost $ 450,000 935,000 72,800 Retail $580,000 1,360,000 63,000 33,000 1,275,000 Net markups Net markdowns Net sales Estimate ending inventory and cost of goods sold using the conventional method. Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.) Answer is complete but not entirely correct. Cost-to- Cost Retail Retail Ratio Beginning inventory $ 450,000 $ 580,000 Plus: Net purchases Freight-in Net markups Goods available for sale Less: Net markdowns 935,000 1,360,000 72,800 63,000 2,003,000 Goods available for sale Cost-to-retail percentage Less: Net sales Estimated ending inventory at retail Estimated ending inventory at cost 533,379 Estimated cost of goods sold $ 924,421 1,457,800 (33,000) 1,970,000 72.50% X (1,275,000) $ 695,000

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 at the end of the year: Net purchases Beginning inventory Freight-in Cost $ 450,000 935,000 72,800 Retail $580,000 1,360,000 63,000 33,000 1,275,000 Net markups Net markdowns Net sales Estimate ending inventory and cost of goods sold using the conventional method. Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.) Answer is complete but not entirely correct. Cost-to- Cost Retail Retail Ratio Beginning inventory $ 450,000 $ 580,000 Plus: Net purchases Freight-in Net markups Goods available for sale Less: Net markdowns 935,000 1,360,000 72,800 63,000 2,003,000 Goods available for sale Cost-to-retail percentage Less: Net sales Estimated ending inventory at retail Estimated ending inventory at cost 533,379 Estimated cost of goods sold $ 924,421 1,457,800 (33,000) 1,970,000 72.50% X (1,275,000) $ 695,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 50E: Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the...

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