Cost flow model. Franklin, LLP, an auditing firm, is reconstructing the records of a client called MultiChips, which is concerned that some of its inventory is missing. The accounting records provide the following information about MultiChips€™ inventories:

You physically counted the ending inventory and found it to be as follows: computer chips, $600,000; potato chips, $240,000; and poker chips, $50,000. Compute the ending inventory according to the accounting records and compare it to the physical count. What discrepancy do you find between the physical count and the accounting records, ifany?

Product Computer Chips Potato Chips Poker Chips Beginning i Transfers into inventory account..1,600,000 Transfers out of inventory accounts from sales1800,0 Ending inventory 600,000 160,000 60,000 600,000 500,000 200,000 180,000 00