Ho Designs experienced the following events during Year $1,$ its first year of operation:

Started the business when it acquired $$70,000$ cash from the issue of common stock.

Paid $$41,000$ cash to purchase imventory.

Sold inventory costing $$37,500$ for $$56,200$ cash.

Physically counted inventory showing $$3,200$ inventory was on hand at the end of the accounting period.

Required:

a$.$ Determine the amount of the difference between book balance and the actual amount of inventory as determined by the physical count.

Difference in book and actual inventory