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?

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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