Question

physic 3) The Merchandise Inventory count of a company h pny count of inventory show 541.000 Which of the following entries is required w a ces balance of $50.00 shrinkage (Assume a perpetual inventory system) 5 points Cost of God Shrinkage 9,000 Merchandise Inventory Cost of Goods Sold 9,000 Cost of Cards Sold Merchandise Inventory - 9.000 9,000 Cash Merchandise Inventory 9,000 9000 4) Meadows Company sold 500 units of inventory at $25 per unit on account. The company uses the perpetual inventory system and the FIFO inventory costing method. The beginning inventory included 400 units at S15 per unit. The most recent purchases include 600 units at $18 per unit. Prepare the journal entries to record the sale. Omit explanations. 5 points DEBIT CREDIT

Answer 1

3) Ans : Option ( 3)

Cost Of Good Sold	$9000
Merchandise Inventory		$9000

Explanation:

Inventory is an asset and assets have a debit balance. Here inventory is decrease due to shrinkage. So to show the decrease in inventoy account would be credited.

Company is using perpetual inventory so shriankage would increase the cost of good sold hence it would be debited.

( expense account generally have debit balance, therefore increase in expense would be shown by debiting the account)

4) Ans:

Date	Account Name	Debit	Credit
1	Account Receivabld	$12500
	To Sales Revenue		$12500
	( 500 unit × $25 per unit)
2	Cost of good sold	$7800
	To Merchandise Inventory		$7800
	[(400×$15 ) + (100× $18) ]