A Company Uses the Retail Inventory Method and Has the Following

Essay

A company uses the retail inventory method and has the following information available concerning its most recent accounting period:
$$\begin{array} { | l | l | r | } \hline& { \text { At Cost } } & \text { At Retail } \\\hline \text { January 1 beginning inventory } & \$ 167,340 & \$ 304,240 \\\hline \text { Cost of goods purchased } & 561,850 & 1,021,560 \\\hline \text { Sales } & & 940,400 \\\hline \text { Sales returns } & & 40,200 \\\hline\end{array}$$

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.