EFlynn Company Uses a Perpetual Inventory System and Reported $500,000

question 67

Multiple Choice

E.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

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Definitions:

Consumer Income

Refers to the total earnings received by consumers, including wages, salaries, benefits, and any other income sources, influencing their purchasing power and spending behaviors.

Price Increase

A situation where the cost of goods or services rises over a period of time.

Supply Elasticity

Measures how the quantity supplied of a good responds to a change in the price of that good.