Fuque Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2013.

Inventory, October 1, 2013
At cost................................ $ 52000
At retail............................... 78000
Purchases
At cost................................ 272000
At retail............................... 423000
Freight in............................. 16600
Purchase Returns
At cost................................ 5600
At retail.............................. 8000
Markups............................... 9000
MArkup Cancellation................ 2000
Markdowns........................... 3600
Normal Spoilage and breakage... 10000
Sales................................... 390000

(A) Using the conventional retail method, prepare a schedule computing estimated lower of cost or market inventory for October 31, 2013.

(B) A department store using the conventional retail inventory method estimates the cost of its ending inventory as $60000. An accurate physical count reveals only $47000 of inventory at lower of cost or market. List the factors that may have caused the difference between the computed inventory and the physical count.