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

Instructions
1. Determine the estimated cost of the merchandise inventory of Clairemont Co. on July 31 by the retail method, presenting details of the computations.
2. a. Estimate the cost of the merchandise inventory of Malibu Co. on March 31 by the gross profit method, presenting details of the computations.
b. Assume that Malibu Co. took a physical inventory on March 31 and discovered that $243,250 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during February andMarch?

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Cost Retail l Clairemont Co. $ 300,000 $ 400,000 Merchandise inventory, July 1 Transactions during July: Purchases (net) Sales 3,400,000 4,600,000 4,715,000 190,000 Sales returns and allowances Malibu Co. $ 225,000 Merchandise inventory, February 1 Transactions during February and March: Purchases (net) 3,200,000 5,200,000 95,000 38% Sales Sales returns and allowances Estimated gross profit rate