Asked by Angelica Renata on May 22, 2024
Verified
Madison Company's perpetual inventory records indicate that $875,300 of merchandise should be on hand on October 31. The physical inventory indicates that $781,900 is actually on hand. Journalize the adjusting entry for the inventory shrinkage for Madison Company for the year ended October 31.
Inventory Shrinkage
The loss of products between acquisition and sale, often due to theft, damage, or errors in counting.
Adjusting Entry
A journal entry made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.
Perpetual Inventory Records
The continuous tracking of inventory levels and updates in real-time, showing the quantity of inventory on hand at all times.
- Acquire proficiency in recording adjusting entries for inventory losses in a perpetual inventory system.
Verified Answer
KU
Learning Objectives
- Acquire proficiency in recording adjusting entries for inventory losses in a perpetual inventory system.