Problem

Wexler Company’s inventory is subject to shrinkage via evaporation. At the end of the curr...

Wexler Company’s inventory is subject to shrinkage via evaporation. At the end of the current financial reporting period, the company’s inventory had a cost of $ 100,000. Management estimates that evaporation has resulted in a 5 percent inventory loss. Assuming that loss is recorded in a separate inventory loss account, prepare the general journal entry to record the inventory shrinkage for the year.

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