23. (2 points) Gross profit method of estimating inventory.

1. Leia completed a physical inventory on 12-31-18. On the basis of her count, Leia determined her ending inventory to be $416,750. In recent years, Leia's gross profit equaled 64% of Leias selling price.

Additional information from Leias accounting records identified the following:

Inventory, 12-31-17 $320,000

Purchases during 2018 $1,208,000

Purchase returns during 2018 $44,000

Purchase discounts during 2018 $9,664

Sales during 2018 $3,066,000

Sales returns during 2018 $160,000

Leia suspects some inventory is missing. Leia used the gross profit method to estimate what her ending inventory should be based on historical facts and trends. Prepare the entry, if necessary, to reflect Leias estimated loss from any missing inventory.

2. Evan completed a physical inventory on 12-31-18. On the basis of his count, Evan determined his ending inventory at retail selling prices was $306,000. In recent years, Evan's gross profit equaled 80% of Evans inventory costs.

Additional information from Evan Additional information from Leias accounting records identified the following:

Inventory cost, 12-31-17 $230,000

Net purchases during 2018 $1,008,000

Net sales revenue during 2018 $1,863,000

Evan suspects some inventory is missing. Evan used the gross profit method to estimate what his ending inventory should be based on historical facts and trends. Prepare the entry, if necessary, to reflect Evans estimated loss from any missing inventory.