Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2024 are as follows: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns Cost Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold Retail $ $ 97,000 187,000 363,000 587,000 9,700 7,700 5,546 11,700 16,700 12,700 3,700 8,700 547,000 10,700 The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,700. 1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the average cost application. Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount. Average cost application

Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2024 are as follows: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns Cost Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold Retail $ $ 97,000 187,000 363,000 587,000 9,700 7,700 5,546 11,700 16,700 12,700 3,700 8,700 547,000 10,700 The company records sales net of employee discounts. Employee discounts for 2024 totaled $4,700. 1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the average cost application. Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount. Average cost application

Name: Sparrow Company uses the retail inventory method to estimate ending i
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: Sparrow Company uses the retail inventory method to estimate ending inventoryand cost of goods sold. Data for 2024 are as follows:BeginninginventoryPurchasesFreight-inPurchasereturnsNet markupsNet markdownsNormalspoilageAbnormalspoilageSalesSales re

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 14E: Refer to the information in E22-13. Required: Prepare the correcting journal entries if the company...

See similar textbooks

Similar questions

Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases thirty fountains for $1,200 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 8% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment.
Business with gross receipts of $25 million or less may treat inventory as nonincidental materials and supplies. Find Regulation Section 1.162-3 and read paragraphs (a)(1) and (a)(2) to help answer the following: Frank owns an auto repair shop that serves a particular model of auto and so he tends to purchase parts in bulk. Frank is eligible to treat inventory as non-incidental materials and elects to do so. In December of 2019 he purchases 24 oil filters. He uses one to repair an auto in January 2020, and then about 2 per month and ends 2020 with 14 filters. Explain how Frank will treat his oil filter inventory.
On Feb. 18, 2019, a fire destroyed the merchandise inventory of Cristina Santiago Shirts. The following information was available from the entity's accounting office: Cost of Goods Sold Transportation In Merchandise Inventory, 1/1/2019 P1,260,000 39,600 300,000 Purchases Discounts 26,400 Purchases Returns and Allowances 46,200 Purchases 1,320,000 Required: Compute the value of the lost merchandise.
On Feb. 18, 2020, a fire destroyed the merchandise inventory of Cristina Santiago S The following information was available from the entity's accounting office: P1,260,000 39,600 Cost of Goods Sold Transportation In Merchandise Inventory, 1/1/2020 Purchases Discounts 300,000 26,400 46,200 1,320,000 Purchases Returns and Allowances Purchases Required: Compute the value of the lost merchandise.
PROBLEM 19: San Juan Manufacturing began operations 5 years ago. On August 13, 2021, a fire broke out in the warehouse destroying all inventory and many records relating to the inventory. The information available is presented below (all sales and purchases are on account): 1/1/2021 8/13/2021 Inventory P 143,850 Accounts receivable 130,590 P 128,890 Accounts payable Collections on accounts 88,140 122,850 receivable, 1/1 to 8/13 753,800 Payments to suppliers, 1/1 to 8/13 487,500 Goods out on consignment at 8/13 at cost 52,900 Summary on previous years’ sales follows: 2018 2019 2020 Sales P 626,000P P705,000 P 680,000 Gross profit 187,800 225,600 231,200 24. What is the inventory loss suffered as a result of the fire if the average gross profit rate is used? 25. What is the inventory loss suffered as a result of the fire if the trend in gross profit rate continues?
On April 30, 2020, a fire damaged the office of Waterloo 1. What is the total amount of sales up to April 30? Problem 13-15 (AICPA Adapted) & 4,200,000 b. 4,220,000 c. 4,140,000 d. 4,160,000 What is the total amount of purchases up to April 30? Company. on March 31, 2020: Accounts receivable Inventory - January1 Accounts payable Sales Purchases 920,000 1,880,000 950,000 3,600,000 1,680,000 • An examination of the April bank statement and canceled checks revealed checks written during the period April 1-3 a. 1,760,000 b. 2,100,000 c. 2,020,000 d. 1,680,000 Accounts payable as of March 31 April merchandise shipments Expenses 240,000 80,000 160,000 3 What is the inventory on April 30? Deposits during the same period amounted to P440,000 which consisted of collections from customers with the exception of P20,000 refund from a vendor for merchåndise returned in April. a. 1,476,000 b. 1,464,000 1,440,000 d. 1,428,000 ( What is the fire loss to be recognized on April 30? Customers…
Refer to the information in E22-13. Required: Prepare the correcting journal entries if the company discovers each error 2 years after it is made and it has closed the books for the second year. Ignore income taxes. E22-13: The following are independent errors made by a company that uses the periodic inventory system: a. Goods in transit, purchased on credit and shipped FOB destination, 10,000, were included in purchases but not in the physical count of ending inventory. b. Purchase of a machine for 2,000 was expensed. The machine has a 4-vear life, no residual value, and straight-line depreciation is used. c. Wages payable of 2,000 were not accrued. d. Payment of next years rent, 4,000, was recorded as rent expense. e. Allowance for doubtful accounts of 5,000 was not recorded. The company normally uses the aging method. f. Equipment with a book value of 70,000 and a fair value of 100,000 was sold at the beginning of the year. A 2-year, non-interest-bearing note for 129,960 was received and recorded at its face value, and a gain of 59,960 was recognized. No interest revenue was recorded and 14% is a fair rate of interest.
Blue Barns sold 136 gallons of paint at $31 per gallon on July 6 to a customer with a cost of $19 per gallon to Blue Barns. Terms of the sale are 2/15, n/45, invoice dated July 6. The customer pays their account in full on July 24. On July 28, the customer discovers 17 gallons are the wrong color and returns the paint for a full cash refund. Blue Barns returns the gallons to their inventory at the original cost per gallon. Record the journal entries to recognize these transactions for Blue Barns.
Gross Profit Method: Estimation of Theft Loss You are requested by a client on September 28 to prepare an insurance claim for a theft loss that occurred on that day. You immediately take an inventory and obtain the following data: The inventory on September 28 indicates that an inventory of 15,000 remains after the theft. During the past year, net sales were made at 50% above the cost of goods sold. Required: 1. Compute the inventory lost during the theft. Round the gross profit percentage to 3 decimal places. 2. Next Level What concerns might you have about the inventory estimation under the gross profit method?
Canary Lawnmowers purchased 300 lawnmower parts at $3.50 per part from a supplier on December 4. Terms of the purchase are 4/10, n/25, invoice dated December 4. Canary Lawnmowers pays their account in full on December 16. On December 21, Canary discovers 34 of the parts are the wrong size, but decides to keep them after the supplier gives Canary an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.
On April 5, a customer returns 20 bicycles with a sales price of $250 per bike to Barrio Bikes. Each bike cost Barrio Bikes $100. The customer had yet to pay on their account. The bikes are in sellable condition. Prepare the journal entry or entries to recognize this return if the company uses A. the perpetual inventory system B. the periodic inventory system
Review the following transactions, and prepare any necessary journal entries for Renovation Goods. A. On May 12, Renovation Goods purchases 750 square feet of flooring (Flooring Inventory) at $3.00 per square foot from a supplier, on credit. Terms of the purchase are 2/10, n/30 from the invoice date of May 12. B. On May 15, Renovation Goods purchases 200 measuring tapes (Tape Inventory) at $5.75 per tape from a supplier, on credit. Terms of the purchase are 4/15, n/60 from the invoice date of May 15. C. On May 22, Renovation Goods pays cash for the amount due to the flooring supplier from the May 12 transaction. D. On June 3, Renovation Goods pays cash for the amount due to the tape supplier from the May 15 transaction.