Kiddie World uses a periodic inventory system and the retail inventory method to

Question

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 for the quarter ending September 30, 2018:

Estimate ending inventory and cost of goods sold (LIFO) & Estimate ending inventory and cost of goods sold using the conventional method

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 Connect 1m, Grades _ 3530ACCT C Secure I https://new cor pps Q Andrew Malinsa l QonMusic Contemp connect.htrri i tge ral * QChapter 5 Flashcand D·QB 2015 My QR VewAll Clothing l MCTPrters inc lob- M for Talent Scirn e room 5 trivagncom r Check my work mode: This chows what is correct or Incorrect for the work you have completed so far It does not Ind cate completion Retun to queation 9 Kiddie Worid uses a penocic inventory system and the retall inventory method to estimate endina inventory and cost of goods sold The folkiing data are available for the quarter endng seaternter 30D1B olms Net .rchases 861,0 1,21,83 let rerkups 43,28 tate ending Inverntory and cst at gatds sold using thcaventlanal mectiod (Round ratlo calculation to 2 declmal places 1.e 0.1234 should be nterad as 12.3416-10 Answar is complate but not entiraly correct. 1,210,000 Flus: Ne:purchasc Freghtn C-natall pancenta 8 420,000 11:20 AM

Explanation / Answer

Answer:-

Explanation:-

Cost of retail percentage = ($1183000/$1690000)×100 = 70%

Estimated Ending Inventory at cost = (70% × $490000) = $343000

Cost Retail Cost to Retail Ratio Beginning Inventory 300000 450000 Plus: Net Purchases 861000 1210000 Freight In 22000 Net Markups 48000 Goods available for sale 1708000 Less: Net Markdowns (18000) Goods available for sale 1183000 1690000 Cost-to-retail percentage 70% Less: Net Sales (1200000) Estimated ending inventory at retail 490000 Estimated ending inventory at cost (343000) Estimated Cost of goods sold 840000

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