Using the following information, what amount of "shrinkage" would be identified under the periodic inventory system? $\begin{array}{|l|r}
\text { Inventory at the beginning of the year } & \$ 300,000 \
\hline \text { Inventory based on count at the end of the year } & \$ 650,000 \
\hline \text { Inventory purchases during the year } & \$ 1,000,000
\end{array}$

A)$ 0
B)$300,000
C)$650,000
D)$700,000

Question

Using the following information, what amount of "shrinkage" would be identified under the periodic inventory system? $\begin{array}{|l|r}
\text { Inventory at the beginning of the year } & \$ 300,000 \
\hline \text { Inventory based on count at the end of the year } & \$ 650,000 \
\hline \text { Inventory purchases during the year } & \$ 1,000,000
\end{array}$

A)$ 0
B)$300,000
C)$650,000
D)$700,000

Quizplus · Accepted Answer

Shrinkage is the difference between the inventory at the beginning of the year and the inventory based on count at the end of the year. In this case, the shrinkage would be $650,000 - $300,000 = $350,000.

Using the Following Information, What Amount of "Shrinkage" Would Be