An inventory taken the morning after a large theft discloses $60,000 of goods on

Question

An inventory taken the morning after a large theft discloses $60,000 of goods on hand as of March 12. The following additional data is available from the books: Inventory on hand, March 1 $ 84,000 Purchases received, March 1 - 11 63,000 Sales (goods delivered to customers) 120,000 Past records indicate that sales are made at 50% above cost. Estimate the inventory of goods on hand at the close of business on March 11 by the gross profit method and determine the amount of the theft loss. Inventory of goods on hand $ Theft loss $

Explanation / Answer

Inventory on Hand , March 1 = 84,000

Add:-Purchases Received ,March-1 = 11,63,000

Less:-Cost of Goods Sold to Customers (120,000*50%) = 60,000

Less:-Theft Loss (balancing Figure) = 11,27,000

Inventory on Hand , March 12 = 60000

..

Answer:-

Inventory of goods on Hand = $60,000

Theft Loss = $11,27,000

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