1. Retail Method; Gross Profit Method

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

   	Cost		Retail
   Celebrity Tan
   Merchandise inventory, August 1	$404,000		$512,000
   Transactions during August:
   Purchases (net)	4,652,000		5,888,000
   Sales			6,057,000
   Ranchworks Co.
   Merchandise inventory, March 1	$267,000
   Transactions during March through November:
   Purchases (net)	3,544,000
   Sales	5,454,000
   Estimated gross profit rate	34%

   Required:

   1. Determine the estimated cost of the merchandise inventory of Celebrity Tan on August 28 by the retail method, presenting details of the computations.

   Celebrity Tan
   Cost of the Merchandise Inventory
   August 31
   		Cost	Retail
   		$	$
   		$	$
   Ratio of cost to retail price:	%
   			$
   			$

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

   Ranchworks Co.
   Cost of the Merchandise Inventory
   November 30
   		Cost
   		$
   		$
   	$
   		$

   2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $198,700 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March thru November? $