Scheckter Department Store uses the retail inventory method. At the end of the first quarter, the following information is available:

Cost Retail Inventory, Jan. | $15,000 $18,000 Purchases 47,000 86,000 Purchases returns 3,000 4,000 Sales 90,000 Sales returns 5,000 Required: (1) Compute the cost of goods sold and the gross profit for the first quarter.

(2) If the company took a physical inventory at the end of the first quarter and the retail value was $14,000, what is the cost of the ending inventory?

(3) What may have caused the difference in the answers for (1) and (2)?

 TYK-1