Part A On the morning of March 21, management of Fitzgerald Company leamed that there had been a break-in at their warehouse, and that SOME of their merchandise inventory (but not ALL the inventory) had been stolen after the close of business on March 20. Fitzgerald immediately took an inventory count on March 21 to figure out the amount of the loss before opening for business. This inventory count indicated that $42,000 of goods were on-hand and present in the warehouse. The following additional data is available from the accounting records of Fitzgerald: Purchases received, March 1-20) $152,000 Inventory on hand, March $120,000 Sales revenue, March 1-20 (goods delivered to customers) $246,000 Records from the recent past indicate that sales prices for the goods that were stolen are set, on average, at 38% above cost. Required (show all calculations): Estimate the inventory of goods on hand at the close of business on March 20th AND determine the amount of the theft loss. Part B Choose the BEST answer: a) Which of the following items should be included in inventory at the balance sheet date? 1) Goods sold to a customer, which are being held for the customer to collect for at his or her convenience. 2) Goods received from another company for sale on consignment. 3) Goods in transit which were sold FOB shipping point 4) Goods in transit which were sold FOB destination. Answer: b) Which of the following is a characteristic of a perpetual inventory system? 1) Cost of goods sold is determined as the amount of purchases less the change in inventory 2) Cost of goods sold is recorded with each sale. 3) Inventory purchases are debited to a Purchases account. 4) Inventory records are not kept for every item. Answer. c) Emie Inc. received inventory on credit in January but did not record the transaction. As of January 31, Emie had not sold or paid for the inventory. (An inventory count was not performed in January.) The effect of this on Emie's financial statements for January 31 would be: 1) assets and liabilities would be UNDERstated 2) assets and liabilities would be OVERstated 3) assets would be UNDERstated and liabilities would be OVERstated 4) assets would be OVERstated 5) no effect