Roseanne's Dress Shop had net retail sales of 500,000 during the current year. The following addi-

SO 7 Retail Method tional information was obtained from the accounting records:

1. Estimate the company's ending inventory at cost using the retail method.
2. Assume that a physical inventory taken at year end revealed an inventory available of 36,000 at retail value. What is the estimated amount of inventory shrinkage (loss due to theft, damage, and so forth) at cost?
SO 7 Gross Profit Method

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At Cost At Retail Beginning Inventory 80,000 120,000 Net Purchases (excluding Freight In) 280,000 440,000 Freight In 20,800