McLaughlin Inc

question 96

Essay

McLaughlin Inc. began business in the current month. The bookkeeper received a report from an outside firm specializing in physical inventory counts that the ending inventory was $1,426.60. However, according to the bookkeeper's records, the inventory at month end was $1,517.50. The bookkeeper has rechecked his records several times and still comes up with the same amount. He believes that the difference between the two amounts must be due to inventory shrinkage. The company had no inventory at the beginning of the month and 70 units on hand per a physical inventory count at the end of the month. The company uses the periodic method. Listed below are the company's purchases for the month: Instructions
Write an explanation for the bookkeeper on how the difference in amounts could occur. (Hint: use different cost formulas to calculate the ending inventory). Provide numerical support.

---

Definitions:

Money Orders

A payment order for a pre-specified amount of money, often used as a safer alternative to cash or personal checks.

Post Office

A government-operated institution responsible for mail distribution and various postal services.

India

A country located in South Asia, known for its diverse culture, languages, and history, and as the world's largest democracy by electorate.

UCC

Stands for the Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.