Reference no: EM132514775

Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021 are as follows:

                                                               Cost                                   Retail

Beginning inventory                          $ 96,000                    $ 186,000

Purchases                                        361,000                      586,000

Freight-in                                             9,600

Purchase returns                                       7,600                        11,600

Net markups                                              16,600

Net markdowns                                         12,600

Normal spoilage                                             3,600

Abnormal spoilage                                              5,520                           8,600

Sales                                                      546,000

Sales returns                                                 10,600

• The company records sales net of employee discounts. Employee discounts for 2021 totaled $4,600.

Required:

Question 1. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail inventory method and the average cost application. (Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.)