posted by Jill .
Year end inventory at cost $55,902, at retail 84,700.
A year-end physical inventory at retail prices yields a total inventory of $78,550. Prepare a calculation showing the company's loss from shrinkage at cost and at retail.
When the retail price is 84,700, the cost would 55,902, therefore how much of loss of inventory at cost when retail price is 78,500 = 51,843
Now the journal entry for shrinkage
Losss of inventory (Shrinkage)4,059 -Debit
Inventory account _credit 4,059
Calculation of inventoryloss at cost= 55,902-51,843=4,059