Chapter 5A, Problem 6PB

Paige’s Office Paper Company uses a perpetual inventory system, so the cost of goods sold is recorded and the inventory records are updated at the time of every sale. The company’s accounting records showed the following related to September 2009 transactions:

On September 30, 2009, Paige conducted a physical count of its inventory and discovered there were actually 1,900 units of inventory on hand.

Requirements

1. 1. Using the information from the physical count, correct Paige’s Office Paper’s cost of goods sold for September.
2. 2. How would this correction change the financial statements for the month?
3. 3. What are some possible causes of the difference between the inventory amounts in the company’s accounting records and the inventory amount from the physical count?