Hartley’s accounting records included the following information:Inventory, 01-01-13                                                                                                             $319,500Purchases during 2013 (excluding shipping)                                                               $1,200,000Purchase returns during 2013                                                                                               $15,000Freight-in on 2013 purchases                                                                                                 $8,500Sales during 2013                                                                                                              $1,998,750 Hartley completed a physical inventory on 12-31-13 and calculated an ending inventory of $525,000, at cost. In recent years, Hartley's gross profit equaled 105% of Hartley’s cost. Hartley suspects some inventory may have been shoplifted. Prepare the entry, if necessary, to reflect the estimated loss from any shoplifted items.

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Asked Nov 6, 2019
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Hartley’s accounting records included the following information:

Inventory, 01-01-13                                                                                                             $319,500

Purchases during 2013 (excluding shipping)                                                               $1,200,000

Purchase returns during 2013                                                                                               $15,000

Freight-in on 2013 purchases                                                                                                 $8,500

Sales during 2013                                                                                                              $1,998,750

 

Hartley completed a physical inventory on 12-31-13 and calculated an ending inventory of $525,000, at cost. In recent years, Hartley's gross profit equaled 105% of Hartley’s cost. Hartley suspects some inventory may have been shoplifted. Prepare the entry, if necessary, to reflect the estimated loss from any shoplifted items.

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Expert Answer

Step 1

Calculate the amount of difference l...

Amount (S) Amount (S)
319.500 00
Particulars
Inventory as on 01-01-13
Add: Net purchase cost
($1,200,000-$15,000+$8,500)
1.193,500.00
1,513,000.00
Less: Cost of goods sold
[s1,998,750x(1-1.05)] |
Ending inventory
Less: Physical inventory as on 12-31-13
Difference loss by theft
99.937.50
| 1,413,062.50|
525.000
s8s.062.50
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Amount (S) Amount (S) 319.500 00 Particulars Inventory as on 01-01-13 Add: Net purchase cost ($1,200,000-$15,000+$8,500) 1.193,500.00 1,513,000.00 Less: Cost of goods sold [s1,998,750x(1-1.05)] | Ending inventory Less: Physical inventory as on 12-31-13 Difference loss by theft 99.937.50 | 1,413,062.50| 525.000 s8s.062.50

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