The records of Sudbury Menswear report the following data for the month of September:

Instructions
(a) Estimate the ending inventory using the conventional retail inventory method.
(b) Assuming that a physical count of the inventory determined that the actual ending inventory at retail prices at the end of September was $42,000, estimate the loss due to shrinkage and theft.
(c) Identify four reasons why the estimate of inventory may be different from the actual inventory at cost.

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Sales Sales returns Additional markups Markup cancellations Markdowns Markdown cancellations Freight on purchases $118,500 2,500 10,500 1,500 9,300 2,800 3,600 Purchases (at cost) Purchases (at sales price) Purchase returns (at cost) Purchase returns (at sales price) Beginning inventory (at cost) Beginning inventory (at sales price) 59,500 112,600 2,500 3,500 32,000 48,500