Retail Method and Internal Control ‘The following figures pertain to the Zenith Gift Store for the two-month period, November and December, 19_8.

Sales $170,000 Purchases (at sales price) $ 80,000 Additional markups 10,000 Inventory at November 1, 198:

Markdowns 25,000 At cost price 105,000 Purchases (at cost price) 52,000 At selling price 160,000

| 1. What should the inventory amount to at December 31, 19_8, at retail price using the conventional retail inventory method?

2. Suppose the allowable shrinkage is 2 percent of sales. The physical inventory at retail prices at December 31 amounts to $50,000. What is the inventory shortage? lo1