Wexler Company\'s inventory is subject to shrinkage via evaporation. At the end

Question

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.(Omit the "$" sign in your response.)

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.

Explanation / Answer

Inventory shrinking loss is 5% of 100,000 = 5000 journal entry debit credit Inventory shrinking loss.................................5000 Inventory...........................................................................5000

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