Question

You own an electronics store with a merchandise book value of $245,000. You conduct a physical inventory and find the value to be $237,000. Your total sales between inventories totaled $360,000. Calculate the shrinkage as a percentage of sales.

Answer 1

2.2%

Explanation:

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Answer 2

It is given that the electronics store has a merchandise book value of $245,000. Thus, in other words it's inventory as per records = $245,000 .

Likewise when the conduct of the physical inventory was done it was found to be of the value $237,000. Thus, in other words the inventory as per physical count = $237,000

Therefore, Shrinkage will be: Inventory on record - Inventory as per physical count.

Therefore, Shrinkage = $245,000 – $237,000 = $8,000

Now, Total sales = $360,000

Therefore, Shrinkage as a percentage of sales is given as:

`(8000)/(36000)* 100 = 2.22\%`

Thus, the shrinkage as a percentage of sales is 2.22%.