A Company Uses the Retail Inventory Method and Has the Following

question 223

Essay

A company uses the retail inventory method and has the following information available concerning its most recent accounting period:
$$\begin{array} { | l | l | r |} \hline& \text { At Cost } & \text { At Retrail } \\ \hline \text { January I beginging inventory } & \$ 167,340 & \$ 304,240 \\\hline\text { Cost of goods purchased } & 561,850 & 1,021,560 \\\hline \text { Sales } & & 940,400 \\\hline\text { Sales returns }&&40,200\\\hline\end{array}$$
1. Use the retail inventory method to estimate the company's year-end inventory at cost.
2. A year-end physical count at retail prices yields a total inventory of $404,800. Prepare a calculation showing the company's loss from shrinkage at cost and at retail.

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Definitions:

Fully Develop

Fully Develop means to reach the maximum potential or maturity in physical, mental, emotional, or cognitive aspects.

Months

Units of time, typically consisting of 28 to 31 days, used in calendars to divide the year into twelve periods.

Depth Perception

The ability to perceive the world in three dimensions and to judge the distance of objects.

Infants

Very young children, typically under one year old, who are in the earliest stages of physical and cognitive development.