You are working as a forensic accountant for a company that has recently discovered discrepancies in their
Question:
You are working as a forensic accountant for a company that has recently discovered discrepancies in their inventory records. After conducting an investigation, you determine that an employee has been stealing inventory and selling it on the side. The employee has been stealing and selling inventory for the past year, and you estimate that the total value of the stolen inventory is $75,000.
a) If the cost of the stolen inventory was 60% of its selling price, what was the total selling price of the stolen inventory?
b) If the employee sold the stolen inventory at a markup of 25% above its selling price, what was the total revenue generated by the employee?
c) If the employee was paid a salary of $50,000 per year and earned $25,000 from selling the stolen inventory, what was the employee's total income over the past year?
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim