Question

Flynn Company uses a perpetual inventory system and reported $500,000 of inventory at the beginning of the month based on a physical count of inventory. During the month, the company bought $45,000 of inventory and sold inventory that had cost $30,000. At the end of the month, the physical count of inventory shows $510,000 on hand. How much shrinkage occurred during the month?

A) $35,000

B) $25,000

C) $5,000

D) $10,000

Answer

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