Question

In: Accounting

The records of Alaska Company provide the following information for the year ended December 31 at...

The records of Alaska Company provide the following information for the year ended December 31

at coast at Retail

January 1 beginning inventory $ 472,950 $ 928,750

Cost of goods purchased 2,843,512 6,280,950
Sales 5,511,700
Sales returns 46,200

  Required:
1. Use the retail inventory method to estimate the company’s year-end inventory at cost.  
2. A year-end physical inventory at retail prices yields a total inventory of $1,691,800. Prepare a calculation showing the company’s loss from shrinkage at cost and at retail.

Complete this questions by entering your answers in the tabs below.

Required 1
Required 2

Use the retail inventory method to estimate the company’s year-end inventory at cost. (Round your ratio calculations to 2 decimal places. (i.e. 10.15%))

At Cost Cost-to-Retail Ratio At Retail
Beginning inventory $472,950 $928,750
Cost of goods purchased 2,843,512 6,280,950
Cost of goods available for sale $3,316,462 $7,209,700
Net sales at retail

Complete this questions by entering your answers in the tabs below

Use the retail inventory method to estimate the company’s year-end inventory at cost. (Round your ratio calculations to 2 decimal places. (i.e. 10.15%))

At Cost Cost-to-Retail Ratio At Retail
Beginning inventory $472,950 $928,750
Cost of goods purchased 2,843,512 6,280,950
Cost of goods available for sale $3,316,462 $7,209,700
Net sales at retail

A year-end physical inventory at retail prices yields a total inventory of $1,691,800. Prepare a calculation showing the company’s loss from shrinkage at cost and at retail. (Round your ratio calculations to 2 decimal places. (i.e. 10.15%))

ALASKA COMPANY
Inventory Shortage
December 31
At Cost At Retail
Estimated inventory not attempted not attempted
Physical inventory not attempted not attempted
Inventory shortage

Solutions

Expert Solution

  1. Use the retail inventory method to estimate the company’s year-end inventory.

                                     ALASKA CO

                               Estimated Inventory

                                  December 31

Goods available for sale

At Cost

At Retail

Beginning inventory

472950

928750

Cost of goods purchased

2843512

6280950

Goods available for sale

3316462

7209700

Sales

5511700

Less: Sales returns

46200

Net sales

5465500

Ending inventory at retail( 7209700 - 5465500)

1744200

Cost ratio: 3316462/7209700 = 0.46 or 46%

Ending inventory at cost (1744200 x 46%)

802332

  1. A year-end physical inventory at retail prices yields a total inventory of $1691800. Prepare a calculation showing the company’s loss from shrinkage at cost and at retail.

                                          ALASKA CO.

                                 Inventory Shortage

                                        December 31

At Cost

At Retail

Estimated inventory (from part 1)

802332

1744200

Physical inventory (46% Cost ratio)

778228

(1691800 x 46%)

1691800

Inventory shortage

24104

52400


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