Question

Your business has two branch stores. The recent physical inventory reports that the merchandise value for each store is: Store A $750,000, and Store B $580,000. The merchandise book value for each store is: Store A $757,000, and Store B $600,000. What is the dollar amount of shrinkage for each store?

Answer 1

Answer: Store A: 7,000 Store B: 20,000

Step-by-step explanation:

Answer 2

The amount of shrinkage for store A is $7000 and for store B is $20000.

What is loss?

"If the selling price of an item is less than the cost price, then the difference between the cost price and the selling price of an item is called the loss".

For the given situation,

The merchandise book value for store A = $757,000

The merchandise book value for store B = $600,000

Based on physical inventory reports,

The merchandise value for store A = $750,000

The merchandise value for store B = $580,000.

The amount of shrinkage determines the loss and it is calculated by taking the difference between the values.

Store A = $757000-750000$

⇒ $7000$

Sore B = $600,000-580000$

⇒ $20000$

Hence we can conclude that the amount of shrinkage for store A is $7000 and for store B is $20000.

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