Question

Ho Designs experienced the following events during Year 1, its first year of operation: 1. Started the business when it acquired $65,000 cash from the issue of common stock. 2. Paid $28,000 cash to purchase inventory. 3. Sold inventory costing $16,900 for $33,000 cash. 4. Physically counted inventory showing $10,900 inventory was on hand at the end of the accounting period. 7:20 Required a. Determine the amount of the difference between book balance and the actual amount of inventory as determined by the physical count Difference in book and actual inventory

Answer 1

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solution :- Value of Inventory purchased $ 28,000 cost of Inventory sold ($ 16,900) closing balance of Inventory as per books. less value of physically counted ($ 10,900) $ 11, 100 Inventory Diffelence $ 200 Difference in book and actual inventory - $ 200