Exercise $3-13$A $($Algo$)$ Effect of shrinkage: Perpetual system LO $3-5$

Ho Designs experienced the following events during Year $1,$ its first year of operation:

Started the business when it acquired $$69,000$ cash from the issue of common stock.

Paid $$29,000$ cash to purchase inventory.

Sold inventory costing $$17,100$ for $$34,000$ cash.

Physically counted inventory showing $$11,500$ inventory was on hand at the end of the accounting period.

Required:

a$.$ Determine the amount of the difference between book balance and the actual amount of inventory as determined by the physical count.