Conventional retail method
Response to the following problem:
Roberson Corporation uses a periodic inventory system and the retail inventory method. Accounting records provided the following information for the 2016 fiscal year:
|
|
Cost
|
Retail
|
|
Beginning inventory
|
$220,000
|
$ 400,000
|
|
Not purchases
|
640,000
|
1,180,000
|
|
Freight-in
|
17,800
|
|
|
Net markups
|
|
16,000
|
|
Net markdowns
|
|
6,000
|
|
Normal spoilage
|
|
3,000
|
|
Net sales
|
|
1,300,000
|
The company records sales to employees net of discounts. These discounts totaled $15,000 for the year. Estimate ending inventory and cost of goods sold using the conventional method.