The 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 indicates the effect of the necessary write-down entry? Asset=Liab.+Stk.EquityRev.-Exp.=Net Inc.Stmt ofCash FlowsA.(1,750) NA (1,750)NA 1,750 (1,750)NAB.NA 1,750 (1,750)NA 1,750 (1,750)NAC.16,250 NA 16,25016,250 NA 16,25016,250 IAD.(18,000) NA (18,000)(18,000) NA (18,000)NA
A. Option A
B. Option B
C. Option C
D. Option D
Answer: A
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