Ace Electronics uses a perpetual inventory system.On May 1,beginning inventory was $100,000.During May,Ace purchased $35,000 of inventory and sold $71,000 of inventory.After the store closed on May 31,employees counted the inventory in the store and found that $60,000 of inventory remained unsold.What was Ace's inventory shrinkage?
A) $4,000
B) $64,000
C) $75,000
D) $46,000

Question

Quizplus · Accepted Answer

Inventory shrinkage is calculated as the difference between the recorded inventory and the actual inventory counted. The recorded inventory should be $100,000 (beginning) + $35,000 (purchases) - $71,000 (sales) = $64,000. The actual inventory counted is $60,000. Therefore, the shrinkage is $64,000 - $60,000 = $4,000.

Ace Electronics Uses a Perpetual Inventory System