Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Q9PSA_2.

Expert-verified
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

$469,010

$928,950

Cost of Goods purchased

3,376,050

6,381,050

Sales

5,595,800

Sales return

42,800

Required

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

Particular

Amount $

Estimated Inventory at retail

$924,182

Less: Physical inventory

(887,309)

Loss from shrinkage

36,873

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.