Zenith Company Inc B) C) D) E)

Multiple Choice

Zenith Company Inc.'s Merchandise Inventory account at the end of year 2015 has a balance of $91,820, but a physical count reveals that only $90,450 of inventory exists. The adjusting entry to record this $1,370 of inventory shrinkage is:

A) $$\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Merchandise } \\\text { Inventory }\end{array} & 1,370 & \\\hline \begin{array} { l } \text { Inventory } \\\text { shrinkage } \\\text { expense }\end{array} & & 1,370 \\\hline\end{array}$$
B) $$\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Purchases } \\\text { discounts }\end{array} & 1,370 & \\\hline \begin{array} { l } \text { Cost of } \\\text { goods } \\\text { sold }\end{array} & & 1,370 \\\hline\end{array}$$
C) $$\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Cost of goods } \\\text { sold }\end{array} & 1,370 & \\\hline \begin{array} { l } \text { Merchandise } \\\text { Inventory }\end{array} & & 1,370 \\\hline\end{array}$$
D) $$\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Inventory } \\\text { shrinkage } \\\text { expense }\end{array} & 1,370 & \\\hline \begin{array} { l } \text { Cost of } \\\text { goods }\end{array} & & 1,370 \\\text { sold } & & \\\hline\end{array}$$
E) $$\begin{array} { | l | l | l | } \hline \text { Cost of } & \\\text { Goods Sold } & 90,450 & \\\hline \begin{array} { l } \text { Merchandise } \\\text { Inventory }\end{array} & & 90,450 \\\hline\end{array}$$