Question: Preparing Journal Entries for Purchases and Sales Using a Perpetual Inventory System Inventory at the beginning of the year cost $13,400. During the year, the company purchased (on account) inventory costing $54,000. Inventory that had cost $60,000 was sold on account for $75,000. At the end of the year, inventory was counted and its cost was determined to be $7,400.
(a) Prepare journal entries to record these transactions, assuming a perpetual inventory system is used.
(b) What was the gross profit?
(c) Was there any shrinkage?