The records of Alaina Co. provide the following information for the year ended December 31:?

Question

January 1 beginning inventory . . . . . . . $ 81,670 $114,610
Cost of goods purchased . . . . . . . . . . . 492,250 751,730
Sales . . . . . . . . . . . . . . . . . . . . . . . . . 786,120
Sales returns . . . . . . . . . . . . . . . . . . . . 4,480
1. Use the retail inventory method to estimate the company’s year-end inventory.
2. A year-end physical inventory at retail prices yields a total inventory of $78,550. Prepare a calculation
showing the company’s loss from shrinkage at cost and at retail

Answer 1

1. Use the retail inventory method to estimate the company’s year-end inventory.
The company's year-end inventory at cost is $55,902.

2. A year-end physical inventory at retail prices yields a total inventory of $78,550. Prepare a calculation showing the company’s loss from shrinkage at cost and at retail
Loss from shrinkage at cost is $4,059, and at retail $6,150.

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