Question

The records of Ayayai Menswear report the following data for the month of September: Sales $117,500 Purchases (at cost) $59,000 Sales returns 2,600 Purchases (at sales price) 112,000 Additional markups 10,600 Purchase returns (at cost) 2,600 Markup cancellations 1,600 Purchase returns (at sales price) 3,400 Markdowns 9,300 Beginning inventory (at cost) 33,000 Markdown cancellations 2,800 Beginning inventory (at sales price) 48,000 Freight on purchases 3,600

Estimate the ending inventory using the retail inventory method. (Round intermediate calculations to 2 decimal place, e.g. 15.21% and the final answers to 0 decimal places, e.g. 5,275.) Ending inventory, at retail $enter a dollar amount Ending inventory, at cost $enter a dollar amount

Assuming that a physical count of the inventory determined that the actual ending inventory at retail prices at the end of September was $40,000, estimate the loss due to shrinkage and theft. (Round intermediate calculations to 2 decimal places, e.g. 15.21% and the final answer to 0 decimal places, e.g. 5,275.) Estimated loss due to shrinkage and theft $enter the Estimated loss due to shrinkage and theft in dollars

Answer 1

	Retail inventory method
		Cost	Retail	Cost to retail
	Beginning Inventory	33,000.00	48,000.00
	Purchases	59,000.00	1,12,000.00
	Freight In	3,600.00
	Purchase returns	(2,600.00)	(3,400.00)
	Markups Net ( 10600-1600)	-	9,000.00
	Current year additions	60,000.00	1,17,600.00
	Goods available for sale	93,000.00	1,65,600.00	56.16%
	Markdown net (9300-2800)	-	(6,500.00)
	Sales		1,17,500.00
	Sales return		(2,600.00)
	Ending inventory at retail		2,74,000.00
	Ending inventory at cost	1,53,878.40
	Loss due to theft
		Cost	Retail
	Ending inventory at retail		2,74,000.00
	Physical stock		(40,000.00)
	Loss due to shrinkage & theft		2,34,000.00