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Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold Data for 2016 are as follows Cost Retail Beginning inventory S 87,000 $177,000 Purchases Freight-in Purchase returns Net markups Net markdowns Normal spoilage Abnormal spoilage Sales Sales returns 577,000 359,000 8,700 6,700 10,700 15,700 11,700 2,700 7,700 537,000 9,700 4,240 The company records sales net of employee discounts. Discounts for 2016 totaled $3,700