Question

Duke Co. uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for the year 2016 is as follow:

The company records sales net of employee discounts.

Required:

Estimate Duke's ending inventory and cost of goods sold for the year using the retail inventory method and the following applications:

1. Average Cost

2. Conventional

3. LIFO

 

Cost

retail

Beginning inventory

$140,000

$280,000

Purchases

420,000

690,000

Freight in

16,000

 

Purchase Returns

12,000

18,000

Net markups

 

24,000

Net markdowns

 

36,000

Normal spiolage

 

5,000

Sales

 

700,000

Sales returns

 

20,000

Employees discounts

 

6,000

 

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