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25 March, 17:05

Kylah Enterprises began the current month with inventory costing $10,000, then purchased inventory at a cost of $35,000. The perpetual inventory system indicates that inventory costing $30,000 was sold during the month for $40,000. If an inventory count shows that inventory costing $14,500 is actually on hand at month-end, what amount of shrinkage occurred during the month?

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  1. 25 March, 17:24
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    Amount of shrinkage=$500.

    Explanation:

    Given dа ta:

    Beginning Inventory Cost=$10,000

    Purchased Inventory cost=$35,000

    Inventory Sold=$30,000

    On-hand Ending Inventory=$14,500

    Required:

    Amount of shrinkage=?

    Solution:

    Shrinkage is the difference between the total ending inventory balance and ending inventory on hand.

    Total Ending inventory=Beginning Inventory+Purchased Inventory - Inventory Sold.

    Total Ending inventory=$10,000+$35,000-$30,000

    Total Ending inventory=$15,000

    Amount of shrinkage=Total Ending inventory - On hand Ending Inventory

    Amount of shrinkage=$15,000-$14,500

    Amount of shrinkage=$500.
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