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

1. Started the business when it acquired $94,000 cash from the issue of common stock.
2. Paid $40,000 cash to purchase inventory.
3. Sold inventory costing $23,200 for $46,000 cash.
4. Physically counted inventory showing $16,500 inventory was on hand at the end of the accounting period.

The difference in book and the actual inventory ___________?