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On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at...

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Accounting

On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and 2025 are as follows:

2024 2025
Cost Retail Cost Retail
Beginning inventory $ 168,750 $ 225,000
Purchases 503,000 633,000 $ 665,000 $ 1,113,000
Purchase returns 4,000 3,650 3,700 5,800
Freight-in 5,800 5,000
Net markups 6,100 10,800
Net markdowns 4,450 7,500
Net sales to customers 453,000 712,000
Sales to employees (net of 30% discount) 20,300 20,300
Normal spoilage 6,000 6,400
Price Index:
January 1, 2024 1.00
December 31, 2024 1.25
December 31, 2025 1.25

Required:

2. Estimate the 2024 ending inventory and cost of goods sold using the average cost retail method.

Note: Round your cost-to-retail percentage to 2 decimal places and round your final answers to nearest whole dollar.

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