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Financial & Managerial Accounting
Found in: Page 268
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

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

At Cost

At Retail

Jan 1 beginning inventory



Cost of Goods purchased





Sales return



A year-end physical inventory at retail prices yields a total inventory of $1,686,900. Prepare a calculation showing the company’s loss from shrinkage at cost and at retail.

Loss from shrinkage totals $36,873.

See the step by step solution

Step by Step Solution

Step 1: Definition of Inventory Shrinkage

The amount of inventory present in the balance sheet but not present in the actual inventory during the physical count is known as inventory shrinkage.

Step 2: Loss from Shrinkage


Amount $

Estimated Inventory at retail


Less: Physical inventory


Loss from shrinkage


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