Question

Hestor Company’s records indicate the following information:
Merchandise inventory, January 1, 2014 ..... $ 550,000
Purchases, January 1 through December 31, 2014 . 2,250,000
Sales, January 1 through December 31, 2014 ... 3,000,000

On December 31, 2014, a physical inventory determined that ending inventory of $600,000 was in the warehouse. Hestor’s gross profit on sales has remained constant at 30%. Hestor suspects some of the inventory may have been taken by some new employees.

Required:
At December 31, 2014, what is the estimated cost of missing inventory?



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  • CreatedSeptember 10, 2014
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