A retailer’s inventory shows the following figures: Opening Physical Inventory..

Question

A retailer’s inventory shows the following figures:

Opening Physical Inventory.. $195,000

Purchases.. $254,000

Net Sales.. $325,000

Customer Returns.. $41,000

Returns to Vendor.. $15,000

Markdowns.. $63,000

Markdown Cancellations.. $8,000

Employee Discounts.. $4,000

Additional Markups.. $5,000

Closing Physical Inventory.. $99,500

What was the shortage/overage dollars and percentage (round your final % answer to two decimal places)?

$3,000 Shortage; 0.92% Shortage

$3,500 Shortage; 1.08% Shortage

$3,000 Overage; 0.92% Overage

$3,500 Overage; 1.08% Overage

A.

$3,000 Shortage; 0.92% Shortage

B.

$3,500 Shortage; 1.08% Shortage

C.

$3,000 Overage; 0.92% Overage

D.

$3,500 Overage; 1.08% Overage

Explanation / Answer

SOLUTION

Correct option is - $3,500 Overage; 1.08% Overage

Calculation of book inventory-

Shortage / Overage of inventory Dollar-

Percentage= 3,500 / 325,000 = 1.08%

Particulars Amount ($) Opening physical inventory 195,000 Add: Purchases 254,000   Customer Returns 41,000   Markdown Cancellations 8,000   Additional Markups 5,000 Less: Net sales (325,000) Returns to Vendor (15,000) Markdowns (63,000) Employee Discounts (4,000) Book inventory 96,000

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