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Requireu l a un Problem 9-6 (Algo) Retail inventory method; average cost and conventional (LO9-3, 9-4) The following information applies to the questions displayed below.) Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021 are as follows: Cost $ 94,000 364,000 9,400 7,400 Retail $184,000 584,000 Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns 11,400 16,400 12,400 3,400 8,400 544,000 10,400 4,919 The company records sales net of employee discounts. Employee discounts for 2021 totaled $4,400. Problem 9-6 (Algo) Part 1 Required: 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.) > Answer is complete but not entirely correct. Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold Average cost application 210,800 128.588 x 326,893 Reyuncu HULI Problem 9.6 (Algo) Retail inventory method; average cost and conventional (LO9-3, 9.4) The following information applies to the questions displayed below.) Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021 are as follows: cost $94.000 364.000 Retail $184.000 584,000 7.400 Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns 11.400 16.400 12,400 3.400 8.400 544,000 10.400 4.919 The company records sales net of employee discounts. Employee discounts for 2021 totaled $4,400. Problem 9-6 (Algo) Part 2 Required: 2. Estimate Sparrow's ending inventory and cost of goods sold for the year using the retail Inventory method and the conventional application. (Round Cost-to-retail percentage to 2 decimal places and final answers to the nearest whole dollar amount.) Answer is complete but not entirely correct. Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold Conventional application $ 192,200 $ 114,494 $ 340987 Problem 9-9 (Algo) Retail method-average cost and conventional (LO9-3, 9-4) [The following information applies to the questions displayed below.) Smith-Kline Company maintains inventory records at selling prices as well as at cost. For 2021, the records indicate the following data: ($ in 000s). Cost Retail Beginning inventory $ 71 $116 Purchases 662 997 Preight-in on purchases Purchase returns Net markups Net markdowns Net sales 907 Problem 9-9 (Algo) part 2 2. Use the retail method to approximate cost of ending inventory valued under Conventional method. (Enter your answer in thousands including 2 decimal places, i.e. 12,550 would be 12.55) Ending Inventory ($ in 000s) Conventional 135 66 You have been hired as the new controller for the Ralston Company. Shortly after joining the company in 2021. you discover the following errors related to the 2019 and 2020 financial statements: a. Inventory at December 31, 2019, was understated by $6,300. b. Inventory at December 31, 2020, was overstated by $9,300. c. On December 31, 2020, inventory was purchased for $3,300. The company did not record the purchase until the inventory w paid for early in 2021. At that time, the purchase was recorded by a debit to purchases and a credit to cash The company uses a periodic inventory system, Required: 1. Assuming that the errors were discovered after the 2020 financial statements were issued, analyze the effect of the errors on and 2019 cost of goods sold, net income, and retained earnings (Ignore income taxes.) 2. Prepare a journal entry to correct the errors. Answer is not complete. Complete this question by entering your answers in the tabs below Required 1 Required 2 Assuming that the errors were discovered after the 2020 financial statements were issued, analyze the effect of the errors on 2020 and 2019 cost of goods sold, net income, and retained earnings. (Ignore income taxes.) 2019 2020 Effect Ending inventory Cost of goods sold Not income Retained earnings Understated Overstated Overstated $ $ * $ Amount Effect 9,300 Overstated 18,900 Understated 18,900 Overstated 18,900 X Understated Amount $ 9,300 $ $ 18,900 $ 18,900 8

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