Reference no: EM132915511
Athena Yu, proprietor of Curio Retail Store, has apprehensions of possible pilferage in her stock of merchandise at December 31, 2018. She requested you to have test checks based on available information and report to her your findings.
The following data were furnished to you:
.....................................................December 31, 2017....................December 31, 2018
Physical inventory at cost...............................P 4,500..........................P4,200
Sales (net).................................................................................... 40,000
Cost of sales................................................................................. 24,000
Gross profit on sales........................................................................ 16,000
Accounts receivable -trade..............................2,000..............................3,500
Accounts payable - trade.................................5,000.............................4,200
Additional information:
- In 2018, accounts written off amounted to P200. Sales returns were P100 and purchase returns, P300.
- Cash receipts from customers (after P300 discounts) totalled P60,000 while cash payments to trade creditors amounted to P40,000.
- Cash paid to customers for goods returned was P80. On this transaction, accounts receivable was debited.
Problem 1: How much is the possible shortage in merchandise inventory at December 31, 2018?