Selected data on merchandise inventory, purchases, and sales for Myrina Co. and Lemnos Co. are as follows:

Instructions
1. Determine the estimated cost of the merchandise inventory of Myrina Co. on May 31 by the retail method, presenting details of the computations.
2. a. Estimate the cost of the merchandise inventory of Lemnos Co. on September 30 by the gross profit method, presenting details of the computations.
b. Assume that Lemnos Co. took a physical inventory on September 30 and discovered that $269,750 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during July throughSeptember?

Cost Retail Myrina Co. Merchandise inventory, May 1 Transactions during May: S 130,000 S 185,000 Purchases (net) Sales Sales returns and allowances 1,382,000 1,975,000 1,950,000 40,000 Lemnos Co. Merchandise inventory, July 1 Transactions during July through September: 280,000 Purchases (net) Sales Sales returns and allowances 3,400,000 5,300,000 100,000 35% Estimated gross profit rate