Question

A recent physical inventory at a department store reports a merchandise value of $875,435. The merchandise book value was $907,340. The merchandise sales were $1,988,345. What is the shrinkage as a percentage of sales? (Shrinkage is the difference between the book value and the merchandise value from a physical inventory.)

Answer 1

1.6% shrinkage

Explanation:

907,340 - 875,435 = 31,905

31,905 / 1,988,345 = .0160 = 1.6%