Asked by drishika gulati on Jun 08, 2024
Verified
The records of Penny Co. indicated that $415,000 of merchandise should be on hand on December 31. The physical inventory indicates that $370,000 of merchandise is actually on hand. Journalize the adjusting entry for the inventory shrinkage for the year ended December 31. Journal Date Description Post. Ref. Debit Credit \begin{array} { | c | c | c | c | c | } \hline&& { \text { Journal } } \\\hline \text { Date } & \text { Description } & \begin{array} { c } \text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline & & & & \\\hline & & & & \\\hline\end{array} Date Description Journal Post. Ref. Debit Credit
Inventory Shrinkage
The loss of products between purchase from supplier and sale to customer, often due to theft, damage, or errors.
Adjusting Entry
A journal entry made in the accounting records at the end of an accounting period to allocate income and expenditure to the correct period.
- Comprehend and implement the notion of inventory shrinkage and its corresponding adjustments within accounting records.
Verified Answer
AJ
Ahmad JundiJun 15, 2024
Final Answer :
Journal Date Description Post. Ref. Debit Credit Dec. 31 Cost of Merchandise Sold 45,000 Merchandise Inventory 45,000\begin{array} { | c | c | c | c | c | } \hline &&{ \text { Journal } } \\\hline \text { Date } & \text { Description } & \begin{array} { c } \text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline \text { Dec. 31 } & \text { Cost of Merchandise Sold } & & 45,000 & \\\hline & \text { Merchandise Inventory } & & & 45,000 \\\hline\end{array} Date Dec. 31 Description Cost of Merchandise Sold Merchandise Inventory Journal Post. Ref. Debit 45,000 Credit 45,000
Learning Objectives
- Comprehend and implement the notion of inventory shrinkage and its corresponding adjustments within accounting records.
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