Selected data on merchandise inventory, purchases, and sales for Jaffe Co. and Coronado Co. are as follows:

Required:

1.

Determine the estimated cost of the merchandise inventory of Jaffe Co. on February 28 by the retail method.*

2.

a.	Estimate the cost of the merchandise inventory of Coronado Co. on October 31 by the gross profit method.*
b.	Assume that Coronado Co. took a physical inventory on October 31 and discovered that $366,500 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during May through October?
	* Refer to the list of Amount Descriptions provided for the exact wording of the answer choices for text entries.

Cost	Retail
Jaffe Co.
Merchandise inventory: February 1	$ 400,000	$ 615,000
Transactions during February:
Purchases (net)	4,055,000	5,325,000
Sales		5,100,000
Coronado Co.
Merchandise inventory: May 1	$ 400,000
Transactions during May through October:
Purchases (net)	3,150,000
Sales	4,750,000
Estimated gross profit rate	35%