Sheridan Co.uses a perpetual inventory system.On May 1,beginning inventory was $350,000.During May,Sheridan purchased $122,500 of inventory and sold $248,500 of inventory.After the store closed on May 31,employees counted the inventory in the store and found that $210,000 of inventory remained unsold.What was Sheridan's inventory shrinkage?
A)$14,000
B)$224,000
C)$262,500
D)$161,000

Question

Quizplus · Accepted Answer

Ending inventory = Beginning inventory + Purchases − Cost of goods sold
= $350,000 + $122,500 − $248,500 = $224,000
Shrinkage = Recorded amount − Actual count
= $224,000 − $210,000 = $14,000