The following amounts summarize Transeer Company's merchandising activities during 2023. Post the activities in the following T- accounts and calculate the account balances. Assume that the company uses perpetual inventory system. Cost of merchandise sold to customers in sales transactions Merchandise inventory balance, Dec. 31, 2019 Invoice cost of merchandise purchases Shrinkage determined on Dec. 31, 2023 Cost of transportation-in Cost of merchandise returned by customers and restored to inventory Purchase discounts received Purchase returns and allowances received Dec. 31, 2022 End. Bal S Merchandise Inventory 0 $ 182,000 36,000 188,000 32,000 2,000 2,300 1,700 4,300

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.