Sales at Retail |
$12,000 |
|
|
Beginning Inventory at Retail |
$ 3,000 |
|
|
Purchases |
$11,000 |
Invoice is for $8,250 but this figure is not used. Instead, the merchandise is "priced out" at retail. |
|
Ending Inventory at Retail |
$ 2,000 |
|
|
Cost-of-Goods-Sold at Retail |
$12,000 |
$3,000 beginning inventory + $11,000 purchases at retail - $2,000 ending inventory at retail = $12,000 |
|
No loss |
$ 0 |
The $12,000 in sales matches the $12,000 retail COGS. Since the retail COGS is not greater than the sales, then there has been no shoplifting or pilferage. |
|
Sales at Retail |
$12,000 |
|
|
Beginning Inventory at Retail |
$ 3,000 |
|
|
Purchases |
$11,000 |
Invoice is for $8,250 but this figure is not used. Instead, the merchandise is "priced out" at retail. |
|
Ending Inventory at Retail |
$ 1,500 |
|
|
Cost-of-Goods-Sold at Retail |
$12,500 |
$3,000 beginning inventory + $11,000 purchases at retail - $1,500 ending inventory at retail = $12,500 |
|
Now there is a loss |
-500 |
The $12,000 in sales is short of the $12,500 retail COGS. Therefore, $500 at retail is missing. |
|
Sales at Retail |
$12,000 |
|
|
Beginning Inventory at Retail multiplied by 75% |
$ 2,250 |
|
|
Purchases |
$ 8,250 |
Invoice is for $8,250 but the merchandise is "priced out" at retail. We want the "true" cost, which is $8,250 |
|
Ending Inventory at Retail multiplied by 75% |
$ 1,125 |
We presume that the gross profit percentage should be 25%. |
|
Cost-of-Goods-Sold at Retail |
$9,375 |
$2,250 true beginning inventory + $8,250 purchases at true cost - $1,125 true ending inventory at retail = $9,375 |
|
Now there is a net profit |
$2,625 |
|
|