Assume that in addition to estimating its ending inventory by the retail method, Harmony Co. of Exercise 6-13 also took a physical inventory at the marked selling prices of the inventory items at the end of 2020. Assume further that the total of this physical inventory at marked selling prices was $109,200.

a. Determine the amount of this inventory at cost.

b. Determine Harmony?s 2020 inventory shrinkage from breakage, theft, or other causes at retail and at cost. Round all calculations to two decimal places.

Exercise 6-13

During 2020, Harmony Co. sold $520,000 of merchandise at marked retail prices. At the end of 2020, the following information was available from its records:

Exhibit 6.13

Transcribed Image Text:

At Retail At Cost Beginning inventory. Net purchases. $127,600 231,240 $256,800 393,600 .............. Inventory Error Understate ending inventory Understate beginning inventory Overstate ending inventory Overstate beginning inventory Cost of Goods Sold Overstated Understated Understated Overstated Profit Understated Overstated Overstated Understated