Question

At the beginning of the year, SnapIt had $10,000 of inventory. During the year, SnapIt purchased $35,000 of merchandise and sold $30,000 of merchandise. A physical count of inventory at year-end shows $14,000 of inventory exists. Prepare the entry to record inventory shrinkage.

Answer 1

The entry to record the  inventory shrinkage is: Debit  Cost of Goods sold                 $15,000; Credit Merchandise inventory $15,000 .

Inventory shrinkage

Based on the information given the appropriate journal entry to record the inventory shrinkage is:

Debit  Cost of Goods sold                 $15,000

Credit Merchandise inventory            $15,000                      

($10,000 +$35,000 - $30,000)

(To record  inventory shrinkage)

Inconclusion the entry to record the  inventory shrinkage is: Debit  Cost of Goods sold $15,000; Credit Merchandise inventory $15,000 .

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