3. Inventory (Total: 20 marks) (a) Retail Method Koala Souvenir uses the retail method of estimating the cost of ending inventory. The inventory data for the month of July are provided in the table below. All indicated figures are exclusive of GST Cost $400,000 $750,000 ($26,000) $20,000 Retail $700,000 $950,000 ($35,000) 1 July Beginning inventory Purchases Purchases Returns Freight Inwards Sales Sales Returns 31 July Inventory (from a physical inventory count) $1,500,000 ($40,000) $100,000 Required: (i) Using the retail method, prepare a schedule to estimate the 31 July inventory figure. Use the ratio of cost to retail to determine the cost value of 31 July inventory figure. You are to round your calculations to 2 decimal places. (4 marks) What is the estimated amount of inventory shortage at cost and at retail? You are to round your calculations to 2 decimal places. (3 marks) Explain the significance of having ongoing shortages in terms of the organisation's internal control procedures. (2 marks) (iii)