Alt Tile Company Uses a Perpetual Inventory System

question 170

Essay

Alt Tile Company uses a perpetual inventory system. Journalize the December 31 adjusting entries based on the following information:
a. The inventory account has a balance of $133,150, while the physical inventory indicates that $130,900 of merchandise is on hand. Assume any shrinkage is a normal amount.
b. Sales returns of $11,000 and merchandise returns of $8,000 are estimated for the current year's sales.

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Definitions:

Problem Frame

A perspective or way of viewing and understanding a problem within a specific context, guiding problem-solving efforts.

Not-invented-here Bias

A cognitive bias in organizations and individuals that undervalues or dismisses innovations or solutions that originated elsewhere.

Organizational Efforts

The collective actions and strategies employed by an organization to achieve its goals and objectives.

Sunk Costs

Permanent losses of resources incurred as the result of a decision.