Toffler Auto Parts uses a perpetual inventory system for the purchase and sale of inventory and had the following information available on November 30, 2017:

Required
1. Calculate the cost of goods sold and the cost of the ending inventory for November under each of the following inventory costing methods:
(a) Moving-weighted-average cost
(b) FIFO cost.
2. Prepare the journal entries required to record the transactions using the perpetual inventory system with FIFO costing.
3. An internal audit has discovered that a new employee-an accounting clerk-had been stealing merchandise and covering up the shortage by changing the inventory records. The external auditors examined the accounting records prior to the employment of the individual and noted that the company has an average gross margin rate of 35 percent. Use the gross margin method to estimate the cost of the inventory shortage (under the FIFO costing method). Explain the difference between the three inventory values-the accounting records, physical count, and estimates-and their importance in valuing inventory.
4. What would be the effect on the financial statements for the year ending November 30, 2017, if the inventory shortage had not been discovered?

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Cost or Selling Price per Unit Purchases and Sales Number of Units Nov. 1 Balance of Purchased Sold inventory 6,000 4,500 7,500 9,000 4,500 10,500 13,500 56 12 16 21 25 29 52 84 52 48 84 Sold Sold