Question

Hudson’s Bay Company (HBC) is Canada’s largest diversified general merchandise retailer, with over 600 retail locations and nearly 60,000 associates located in every province in Canada. HBC’s two banners are The Bay and Home Outfitters. In 2017, assume that HBC reported Cost of Goods sold of $11,571 million, Ending Inventory for the current year of $3,259 million, and Ending Inventory for the previous year (2016) of $3,641 million.

Required:
If you knew that the cost of inventory purchases was $11,289 million, could you estimate the cost of shrinkage during the year? (Enter your answer in millions.)

Answer 1

All the figures are in million $

Cost of shrinkage during the year = Beginning inventory + purchases - ending inventory - cost of goods sold

Cost of shrinkage during the year = $3,641 + $11,289 - $3,259 - $11,571

Cost of shrinkage during the year = $100