Shrinkage Losses
at Year-End, the Perpetual Inventory Records of James

Essay

Shrinkage losses
At year-end, the perpetual inventory records of James Products indicate 105 units of a particular product in inventory, acquired at the following dates and unit costs:
A complete physical inventory taken at year-end indicates only 93 units of this product actually are on hand.
Determine the dollar amount of the shrinkage loss assuming that James uses:
$$\begin{array} { | l | l | l | l | } \hline \text { Acquisition Date } & \text { Quantity } & \text { Unit Cost } & \text { Total Cost } \\\hline \text { May 3 } & 45 & \$ 25 & \$ 1,125 \\\hline \text { Sept 9 } & \underline { 60 } & \$ 39 & \underline { 2,340 } \\\hline \text { Total on hand } & \underline { \underline { 105 } } & & \underline { \underline { \$ 3,465 } } \\\hline\end{array}$$ $$\begin{array} { | l | l | } \hline \text { (a) A LIFO flow assumption. } & \$ \_\_\_\_\\\hline \text { (b) A FIFO flow assumption. } & \$\_\_\_\_ \\\hline\end{array}$$