please type your answer, answer all parts and provide a brief explination and show ALL workProblem 2 (15%):

Tangor Inc. uses the conventional retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2018.

At Cost At Retail

Inventory, 10/1/18 52,000 78,000

Freight in 16,600

Markdowns (net) 3,600

Markups 9,000

Markup cancellations 2,000

Purchases 272,000 423,000

Sales 385,000

Purchase returns 5,600 8,000

Normal spoilage and breakage 10,000

Employee discounts 5,000

Required:

(a) Using the conventional retail method, prepare a schedule computing inventory at 10/31/18.

(b) What factors might cause the difference between computed inventory and the physical count.