Question

Windsor, Inc. uses a perpetual inventory system and reported $512,000 of inventory at the beginning of the month based on a physical count of inventory. During the month, the company bought $53,000 of inventory and sold inventory that had cost $48,000. At the end of the month, the physical count of inventory shows $515,000 on hand. How much shrinkage occurred during the month?

Answer 1

Answer:

--Correct Answer =  $ 2,000

Explanation:

the step by step Workings can be seen below

Beginning Inventory                                           $512,000

Add: Purchases                                                   $53,000

Less: Cost of goods Sold                                   $48,000

Ending Inventory as per perpetual method      $517,000

Less: Ending Inventory as per physical count  $515,000

Shrinkage amount                                                $2,000