The following amounts summarize Berloni Company's merchandising activities during 2017. Berloni uses the perpetual inventory system. Set up T-accounts for Inventory and Cost of Goods Sold. Post the amounts below into the accounts and calculate the balances.
Briefly discuss the possible causes of the shrinkage amount.
Cost of inventory sold to customers............................................ $93,000
Inventory balance, December 31, 2016......................................... 15,500
Invoice total for inventory purchases............................................ 98,000
Cost of freight-in ............................................................................ 5,000
Cost of undamaged inventory returned by customers.................. 10,000
Shrinkage calculated on December 31, 2017......................... 12,000
Purchase discounts received..................................................... 3,000
Purchase returns and allowances received..................................... 1,500