Physical Inventory Count, Ownership of Goods, and Consigned Goods Video Lessons

Concept

# Problem: Steal Me Company’s accounting records indicated the following information: Inventory, beginning of 2011                           $1,000,000 Purchases during 2011 5,000,000 Sales during 2011 6,400,000 A physical inventory taken on December 31, 2011, revealed actual ending inventory at cost was$1,150,000. Steal Me’s COGS on sales has regularly been 75 percent in recent years. The company believes some inventory may have been stolen during the year. What is the estimated amount of stolen inventory at December 31, 2011? a. $50,000 b.$200,000 c. $350,000 d.$370,000

###### Problem Details

Steal Me Company’s accounting records indicated the following information:

Inventory, beginning of 2011                           $1,000,000 Purchases during 2011 5,000,000 Sales during 2011 6,400,000 A physical inventory taken on December 31, 2011, revealed actual ending inventory at cost was$1,150,000. Steal Me’s COGS on sales has regularly been 75 percent in recent years. The company believes some inventory may have been stolen during the year. What is the estimated amount of stolen inventory at December 31, 2011?

a. $50,000 b.$200,000

c. $350,000 d.$370,000