Question

uses a perpetual inventory system and reported $526,000 of inventory at the beginning of the month based on a physical count of inventory. During the month, the company bought $59,200 of inventory and sold inventory that had cost $40,250. At the end of the month, the physical count of inventory shows $528,000 on hand. How much shrinkage occurred during the month

Answer 1

Answer:

$16,950

Explanation:

The computation of the shrinkage that occurred during the month is shown below:

Balance inventory = Beginning Inventory + Inventory purchased - Inventory sold

= $526,000+ $59,200 - $40,250

= $544,950

Now the shrinkage inventory is

= Balance inventory - Physical count of inventory shows

= $544,950 - $528,000

= $16,950