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Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2024 are as follows:
CostRetailBeginning inventory$ 88,000$ 178,000Purchases356,000578,000Freight-in8,800Purchase returns6,80010,800Net markups15,800Net markdowns11,800Normal spoilage2,800Abnormal spoilage4,8677,800Sales538,000Sales returns9,800
The company records sales net of employee discounts. Employee discounts for 2024 totaled $3,800.
Required:
1. Estimate Sparrows ending inventory and cost of goods sold for the year using the retail inventory method and the average cost application.
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