Abhaliya Seginning inventoryPurchasesFreight-inPurchase returnsSparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2024are as followsNet markupsNet markdownsNormal spollageAbnormal spoilageSalesSales returnsCost$ 85,000352.0008,5006,500Show Transcribed Text4,760JEstimated ending inventory at retailEstimated ending inventory at costEstimated cost of goods soldRetall$ 175,000575,000The company records sales net of employee discounts. Employee discounts for 2024 totaled $3,500.$$$10,50015,50011,5002,5007,500$35,0009,500Required:1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the average costapplication.Note: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.202,500119,475 C314,765cAnswer is complete but not entirely correct.Average costapplicationSRequired:1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the average costapplicationNote: Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.ReturC

Retailers who resale products compute their estimated ending inventory balances using the retail…

Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold Data for 2024 are as follows Seginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal spollage Abnormal spollage Cost $ 85,000 352,000 6,500 4,760 Retall $ 175,000 575,000 10,500 15,500 11,500 2,500 7,500 535,000 9,500 Sales Sales returns The company records sales net of employee discounts. Employee discounts for 2024 totaled $3,500

Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold Data for 2024 are as follows Seginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal spollage Abnormal spollage Cost $ 85,000 352,000 6,500 4,760 Retall $ 175,000 575,000 10,500 15,500 11,500 2,500 7,500 535,000 9,500 Sales Sales returns The company records sales net of employee discounts. Employee discounts for 2024 totaled $3,500

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

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 13E: Retail Inventory Method The following information relates to the retail inventory method used by...

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Retail Inventory Method The following information relates to the retail inventory method used by Jeffress Company: Required: 1. Compute the ending inventory by the retail inventory method using the following cost flow' assumptions (round the cost-to-retail ratio to 3 decimal places): a. FIFO b. average cost c. LIFO d. lower of cost or market (based on average cost) 2. Next Level What assumptions are necessary for the retail inventory method to produce accurate estimates of ending inventory?
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Calculate the cost of goods sold dollar value for A74 Company for the sale on March 11, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average (AVG).
Use the last-in, first-out (LIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.
Inventory Valuation Specific identification method Weighted average cost method FIFO method LIFO method LIFO liquidation LIFO conformity rule LIFO reserve Replacement cost Inventory profit Lower-of-cost-or-market (LCM) rule Inventory turnover ratio Number of days sales in inventory Moving average (Appendix) The name given to an average cost method when a weighted average cost assumption is used with a perpetual inventory system. An inventory costing method that assigns the same unit cost to all units available for sale during the period. A conservative inventory valuation approach that is an attempt to anticipate declines in the value of inventory before its actual sale. An inventory costing method that assigns the most recent costs to ending inventory. The current cost of a unit of inventory. An inventory costing method that assigns the most recent costs to cost of goods sold. A measure of how long it takes to sell inventory. The IRS requirement that when LIFO is used on a tax return, it must also be used in reporting income to stockholders. An inventory costing method that relies on matching unit costs with the actual units sold. The portion of the gross profit that results from holding inventory during a period of rising prices. The result of selling more units than are purchased during the period, which can have negative tax consequences if a company is using LIFO. The excess of the value of a companys inventory stated at FIFO over the value stated at LIFO. A measure of the number of times inventory is sold during the period.
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Inventory Write-Down Byron Company has five products in its inventory and uses the FIFO cost flow assumption. Specific data for each product are as follows: Required: 1. What is the correct inventory value, assuming the LCNRV rule is applied to each item of inventory? 2. What is the correct inventory value, assuming the LCNRV rule is applied to the total of inventory? 3. Next Level Comment on any differences that result from applying the LCNRV rule to individual items compared to the total of inventory.
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