1.Determine the overage/shortage in each of the following scenarios:

■A $100 dress is stolen from a store.

■A markdown from $20 to $16.99 is recorded as 10 units instead of 50.

■A sale of $100 is incorrectly recorded as $120.

■Goods received on the books at $2 per unit are incorrectly ticketed as $3 per unit; there are 100 units.

■The return of a $50 blouse by a customer is recorded as $60.

■The return of a $50 blouse by a customer is recorded as a sale of $80.

■A broken $60 vase is thrown into the trash. No transaction is recorded to remove the vase from the books.

■A markup is taken on 200 items from $80 to $90; the data entry person enters 20 items.

■Goods transferred from Store 1 to Store 2 were miscounted; 50 items at $20 each were recorded as 60 items.

■A salesperson guessed at the selling price of an $80 item and recorded the transaction at $85.

2.Determine the overage/shortage for a men’s store when the following occurred:

■A sweater markdown from $45 to $35.99 is entered as 100 units instead of 500.

■A $12 sale of underwear is incorrectly transacted as $120.

240

■The return of a $65.99 jacket by a customer is transacted as a credit of $75.99.

■A hundred wallets received on the books at $40 per unit are incorrectly ticketed as $44 per unit.

■A $60 shirt is stolen.

■A markup is taken on 300 pairs of trousers from $80 to $85; the price tickets are never changed.

■A salesperson guessed at a selling price of a $285 unticketed sport coat and transacted the sale at $265.

3.What is the store’s overage/shortage percent in problem 2 above when the store’s annual sales are $515,786?

4.In the LIFO/FIFO example given in the “LIFO and FIFO” section here, assume all of the shirts were sold at $50. What is the effect on cost of goods sold? Gross margin?

Create a spreadsheet for Problem 2 in the “Solving Problems” section of this chapter. Suggestions: Create a “book” column to show the impact of each scenario on book inventory, a “physical” column to show the impact on the physical inventory, a column to reflect the difference between the two, and a column to indicate whether the situation resulted in an overage or shortage. Remember that three things reduce inventory (sales, markdowns, and returns to vendors) and that three things increase inventory (customer returns, markups, and new merchandise receipts). Remember that shortage is an absolute value that has no positive or negative sign.

Answer rating: 100% (QA)

Solution Lets go through each scenario Scenario 1 A 100 dress is stolen from a store Book Inventory 100 Physical Inventory 100 Stolen items reduce inventory Difference 100 Physical Book OverageShortag... View the full answer