Chapter 7 Chapter 7 Inventory: Merchandising Transactions AP-23BLO 367 AB Retailers had the following business transactions during the month of April 2019. Apr 10 AB Retailers bought $3,500 worth of T-shirts from Unique Designers. The invoice showed payment terms of 2/10, 1/30 Apr 10 Soon after AB Retailers received the products, it was discovered that $500 worth of T-shirts did not meet quality standards. These goods were retumed to the supplier. Apr 20 AB Retailers paid the remaining invoice balance. Apr 22 AB Retailers sold all the goods for $4,500 to SK Stores on terms 3/10, 1/45. SK Stores paid for the goods purchased Required a) Prepare the journal entries to record the above transactions. Assume AB Retailers uses the perpetual inventory system. Date Account Title and Explanation Apr 28 Debit Credit b) Calculate April's ending inventory based on the above transactions. Assume that merchandise inventory at the beginning of April amounted to $1,500. Inventory: Merchandising Transactions Chapter 7 c) At the end of April, an inventory count was performed. The balance of inventory according to the count was $1,300. Management deemed that the difference between the ledger account and physical inventory count was due to theft (shrinkage). Prepare the journal entry to adjust the merchandise inventory balance on April 30. Date Account Title and Explanation Debit Credit d) What are some controls used to safeguard inventory against shrinkage