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:
$$\begin{array} { | l | l | r |} \hline& \text { At Cost } & \text { At Retrail } \\ \hline \text { January I beginging inventory } & \$ 167,340 & \$ 304,240 \\\hline\text { Cost of goods purchased } & 561,850 & 1,021,560 \\\hline \text { Sales } & & 940,400 \\\hline\text { Sales returns }&&40,200\\\hline\end{array}$$
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.