Cost flow model. Conrad. LLP, an auditing firm, is reconstructing the records of a client called Chips Galore, which is concerned that some of its inventory is missing.

The accounting records provide the following information about Chips' inventories:

You physically counted the ending inventory and found it to be as follows: computer chips. $100,000; potato chips, $40,000; and poker chips. $10,000. 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, if any?

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Computer Chips Product Potato Chips Poker Chips Beginning inventory. $200,000 $ 80,000 $ 20,000 Transfers into inventory accounts 800,000 600,000 Transfers out of inventory accounts from sales 900,000 560,000 200,000 210,000 Ending inventory 2 ?