Asked by Michelle Nunez on May 06, 2024
Verified
Alt Tile Company uses a perpetual inventory system. Journalize the December 31 adjusting entries based on the following information:
a. The inventory account has a balance of $133,150, while the physical inventory indicates that $130,900 of merchandise is on hand. Assume any shrinkage is a normal amount.
b. Sales returns of $11,000 and merchandise returns of $8,000 are estimated for the current year's sales.
Perpetual Inventory System
An approach to inventory management where updates to inventory records are made in real-time after each purchase, sale, or return transaction.
Shrinkage
The loss of inventory that can occur due to theft, damage, or errors in a company's stock.
Adjusting Entries
Journal entries made at the end of an accounting period to update account balances before preparing financial statements.
- Document adjusting transactions for stock levels and projected customer returns and allowances.
Verified Answer
YJ
Learning Objectives
- Document adjusting transactions for stock levels and projected customer returns and allowances.