CJ Company suspects that there is missing inventory in its warehouse at December 31, 2021. All sales and purchases were made on account. Also, the gross profit rate based on net sales is consistent every year. To aid in your investigation, you obtained the following: How much is the missing inventory during the year? January 1, 2021December 31, 2021Physical inventory, at costNet sales|Cost of goods soldAccounts receivable - tradeAccounts payable - tradeNotes receivable - tradeNotes payable - trade600,0001,000,0004,000,000?2,400,000?1,200,0001,350,0001,500,0001,850,000525,000370,000300,000200,000In 2021, accounts written off amounted to P100,000. Sales returns were P150,000 andpurchase returns were P80,000. Collections from customers were P6,000,000, afterdeducting sales discounts of P200,000; while payments to trade creditors wereP4,000,000, after deducting purchase discounts of P300,000.

Answered: January 1, 2021 December 31, 2021…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 12E: Retail Inventory Method The following data were available from Hegge Department Stores records for...

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CJ Company suspects that there is missing inventory in its warehouse at December 31, 2021. All sales and purchases were made on account. Also, the gross profit rate based on net sales is consistent every year. To aid in your investigation, you obtained the following:

How much is the missing inventory during the year?

January 1, 2021
December 31, 2021
Physical inventory, at cost
Net sales
|Cost of goods sold
Accounts receivable - trade
Accounts payable - trade
Notes receivable - trade
Notes payable - trade
600,000
1,000,000
4,000,000
?
2,400,000
?
1,200,000
1,350,000
1,500,000
1,850,000
525,000
370,000
300,000
200,000
In 2021, accounts written off amounted to P100,000. Sales returns were P150,000 and
purchase returns were P80,000. Collections from customers were P6,000,000, after
deducting sales discounts of P200,000; while payments to trade creditors were
P4,000,000, after deducting purchase discounts of P300,000.

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