Rutherford Company's records indicate the following information for the year: Merchandise inventory, 1/1 Purchases Net sales $ 4,00,000 25,00,000 40,00,000 On December 31, a physical inventory determined that an ending inventory of $450,000 was in the warehouse. Rutherford's gross profit on sales has remained constant at 40%. Rutherford suspects some of the inventory may have been taken by some new employees. On December 31, what is the estimated cost of missing inventory? a. $40,000 b. $50,000 c. $100,000 d. $150,000

Rutherford Company's records indicate the following information for the year: Merchandise inventory, 1/1 Purchases Net sales $ 4,00,000 25,00,000 40,00,000 On December 31, a physical inventory determined that an ending inventory of $450,000 was in the warehouse. Rutherford's gross profit on sales has remained constant at 40%. Rutherford suspects some of the inventory may have been taken by some new employees. On December 31, what is the estimated cost of missing inventory? a. $40,000 b. $50,000 c. $100,000 d. $150,000

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

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 3RE: Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of...

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On January 1, Pope Enterprises inventory was 625,000. Pope made 950,000 of net purchases during the year. On its year-end income statement, Pope reported cost of goods sold of 1,025,000. Calculate Popes December 31 ending inventory.
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