Cost flow model. The law firm of Candice & Bergman has asked your help in computing damages in a lawsuit. The law firm's client claims an employee has stolen merchandise and is suspicious because this employee has just opened a discount electronics store. The law firm provides you with the following information from the accounting records:

You physically counted the ending inventory and found it to be as follows: videocassette recorders, $20,000; televisions, $5,000; and compact disc players, $10,000.
Compute the ending inventory according to the accounting records and compare it to the physical count. What discrepancy, if any, between the physical count and the accounting records could be attributed to the theft?

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Beginning inventory Transfers into inventory accounts Transfers out of inventory accounts from sales Ending inventory Product Videocassette Compact Disc Recorders Televisions Players $20,000 $20,000 $15,000 40,000 50,000 20,000 35,000 55.000 25,000 2 2 ?