Retail Method; Gross Profit Method

Selected data on inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks Co. are as follows:

		Cost		Retail
Celebrity Tan Co.
Inventory, August 1		$216,000		$328,000
Transactions during August
	Purchases (net)	2,490,000		3,772,000
	Sales			3,880,000
Ranchworks Co.
Inventory, March 1		$278,000
Transactions during March through November:
	Purchases (net)	3,698,000
	Sales	6,057,000
Estimated gross profit rate		38%

Required:

1. Determine the estimated cost of the inventory of Celebrity Tan Co. on August 31 by the retail method, presenting details of the computations.

Celebrity Tan Co.
Estimated Cost of Inventory
August 31
		Cost	Retail
		$	$
		$	$
Ratio of cost to retail price:	%
			$
			$

2a. Estimate the cost of the inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations.

Ranchworks Co.
Estimated Cost of Inventory
November 30
		Cost
		$
		$
	$
		$

2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $214,660 of inventory was on hand. What was the estimated loss of inventory due to theft or damage during March through November? $