Question: Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2011 are as follows: The company records

Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2011 are as follows:


The company records sales net of employee discounts. Discounts for 2011 totaled $4,000.


Required:

Estimate Sparrow'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 (average, LCM)


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