Garrett Company uses the perpetual inventory system. The company's records showed a book balance of $18,000 in the Merchandise Inventory account, and a physical count finds only $16,250 of inventory. Which of the following represents the financial statement effect of writing-down the inventory? Balance Sheet A. B. C. D. Assets (1,750) n/a 16,250 (18,000) Multiple Choice O O Option B Option C Liabilities + n/a 1,750 n/a n/a Stockholders' Equity (1,750) (1,750) 16,250 (18,000) Revenue n/a n/a 16,250 (18,000) Income Statement Expense 1,750 1,750 n/a n/a = Net Income (1,750) (1,750) 16,250 (18,000) Statement of Cash Flows n/a n/a 16,250 Investing Activity n/a
Garrett Company uses the perpetual inventory system. The company's records showed a book balance of $18,000 in the Merchandise Inventory account, and a physical count finds only $16,250 of inventory. Which of the following represents the financial statement effect of writing-down the inventory? Balance Sheet A. B. C. D. Assets (1,750) n/a 16,250 (18,000) Multiple Choice O O Option B Option C Liabilities + n/a 1,750 n/a n/a Stockholders' Equity (1,750) (1,750) 16,250 (18,000) Revenue n/a n/a 16,250 (18,000) Income Statement Expense 1,750 1,750 n/a n/a = Net Income (1,750) (1,750) 16,250 (18,000) Statement of Cash Flows n/a n/a 16,250 Investing Activity n/a
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Garrett Company uses the perpetual inventory system. The company's records showed a book balance of $18,000 in the Merchandise Inventory account, and a physical count finds only $16,250 of inventory. Which of
the following represents the financial statement effect of writing-down the inventory?
A.
B.
C.
D.
Assets
(1,750)
n/a
16,250
(18,000)
Multiple Choice
O
O
O O
Option B
= Liabilities +
n/a
1,750
n/a
n/a
Option C
Option D
Balance Sheet
Option A
Stockholders'
Equity
(1,750)
(1,750)
16,250
(18,000)
Revenue
n/a
n/a
16,250
(18,000)
Income Statement.
Expense
1,750
1,750
n/a
n/a
= Net Income
(1,750)
(1,750)
16,250
(18,000)
Statement of Cash Flows
n/a
n/a
16,250 Investing Activity
n/a](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d7c6df9-9072-40bc-ad85-7ace55fd8504%2F161cdc21-3aed-4269-8000-e26c28da8600%2Fr1v286a_processed.png&w=3840&q=75)
Transcribed Image Text:Garrett Company uses the perpetual inventory system. The company's records showed a book balance of $18,000 in the Merchandise Inventory account, and a physical count finds only $16,250 of inventory. Which of
the following represents the financial statement effect of writing-down the inventory?
A.
B.
C.
D.
Assets
(1,750)
n/a
16,250
(18,000)
Multiple Choice
O
O
O O
Option B
= Liabilities +
n/a
1,750
n/a
n/a
Option C
Option D
Balance Sheet
Option A
Stockholders'
Equity
(1,750)
(1,750)
16,250
(18,000)
Revenue
n/a
n/a
16,250
(18,000)
Income Statement.
Expense
1,750
1,750
n/a
n/a
= Net Income
(1,750)
(1,750)
16,250
(18,000)
Statement of Cash Flows
n/a
n/a
16,250 Investing Activity
n/a
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