Windsor,Inc

question 11

Multiple Choice

Windsor,Inc.uses a perpetual inventory system and reported $250,000 of inventory at the beginning of the month based on a physical count of inventory.During the month,the company bought $22,500 of inventory and sold inventory that had cost $15,000.At the end of the month,the physical count of inventory shows $255,000 on hand.How much shrinkage occurred during the month?

• A)$17,500
• B)$12,500
• C)$2,500
• D)$5,000

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Definitions:

Constant Dollar

A term used to describe the value of currency after adjusting for inflation, reflecting purchasing power across different time periods by removing the effects of price changes.

Current Dollar

A term used to describe the nominal monetary value of goods, services, or financial assets at the current time, without adjustment for inflation.

Real GDP

Gross Domestic Product adjusted for inflation, reflecting the value of all goods and services produced by an economy in a given year in real terms.

GDP Deflator

An economic measure that accounts for inflation by converting output measured at current prices into constant-dollar GDP.