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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:   Cost Retail Beginning inventory $ 300,000 $ 450,000 Net purchases 861,000 1,210,000 Freight-in 22,000   Net markups   48,000 Net markdowns   18,000 Net sales   1,200,000 Estimate ending inventory and cost of goods sold (average cost). Cost-to-retail percentage Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.) Cost Retail Cost-to-Retail Ratio Beginning inventory $300,000 $450,000   Plus: Net purchases 861,000 1,210,000   Freight-in 22,000     Net markups   48,000   Less: Net markdowns   (18,000)   Goods available for sale 1,183,000 1,690,000   Cost-to-retail percentage     70.45% incorrect Less: Net sales   (1,200,000)   Estimated ending inventory at retail   $490,000   Estimated ending inventory at cost 421,000 answer incorrect     Estimated cost of goods sold $1,229,000 answer incorrect

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:   Cost Retail Beginning inventory $ 300,000 $ 450,000 Net purchases 861,000 1,210,000 Freight-in 22,000   Net markups   48,000 Net markdowns   18,000 Net sales   1,200,000 Estimate ending inventory and cost of goods sold (average cost). Cost-to-retail percentage Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.) Cost Retail Cost-to-Retail Ratio Beginning inventory $300,000 $450,000   Plus: Net purchases 861,000 1,210,000   Freight-in 22,000     Net markups   48,000   Less: Net markdowns   (18,000)   Goods available for sale 1,183,000 1,690,000   Cost-to-retail percentage     70.45% incorrect Less: Net sales   (1,200,000)   Estimated ending inventory at retail   $490,000   Estimated ending inventory at cost 421,000 answer incorrect     Estimated cost of goods sold $1,229,000 answer incorrect

Cornerstones of Financial Accounting
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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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:

  Cost Retail
Beginning inventory $ 300,000 $ 450,000
Net purchases 861,000 1,210,000
Freight-in 22,000  
Net markups   48,000
Net markdowns   18,000
Net sales   1,200,000

Estimate ending inventory and cost of goods sold (average cost). Cost-to-retail percentage

Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.)

Cost Retail Cost-to-Retail Ratio
Beginning inventory $300,000 $450,000  
Plus: Net purchases 861,000 1,210,000  
Freight-in 22,000    
Net markups   48,000  
Less: Net markdowns   (18,000)  
Goods available for sale 1,183,000 1,690,000  
Cost-to-retail percentage     70.45% incorrect
Less: Net sales   (1,200,000)  
Estimated ending inventory at retail   $490,000  
Estimated ending inventory at cost 421,000 answer incorrect    
Estimated cost of goods sold $1,229,000 answer incorrect  
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