I have the correct answer for #1 but can anyone explain what they are asking me to do on #2? There are no examples in my book for this. Thanks
Retail inventory method P4
The records of Alaina Co. provide the following information for the year ended
December 31:
At Cost At Retail
January 1 beginning inventory.. . $ 81,670 $114,610
Cost of goods purchased.. . 492,250 751,730
Sales.. . 786,120
Sales returns.. . 4,480
Required
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.
