The records of Alaska Company provide the following information for the year end
ID: 2608160 • Letter: T
Question
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%))
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%))
Explanation / Answer
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
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
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
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