[Macktwin88]

Explain why the Merchandise Inventory account will usually require adjustment at year-end.

[dawgsnkats]

mack, to ensure proper valuation of inventory, there will be a inventory count at year end, and the adjustment will be the difference of purchases of inventory less sales of inventory less actual inventory. The inventory account will have a contra account to post to also for the amount of shrinkage/theft/destroyed goods etc.. In addition, to valuate the inventory is a must. For example, oil today isn't the same value as it will be next week, much less in a year. Thus the need for adjustments. Add to that a blended value for FIFO or LIFO you can see why an adjustment is needed. Hope this helps.

[morgaine300]

Mack, considering this is homework help, I'm assuming all these questions you've been asking (here and the other forum) are homework questions. Please read the red announcement at the top of the page. We're not here to just answer your stuff for you -- you should make some attempt to do it yourself first and then check and see if are right.

[Macktwin88]

mack, to ensure proper valuation of inventory, there will be a inventory count at year end, and the adjustment will be the difference of purchases of inventory less sales of inventory less actual inventory. the inventory account will have a contra account to post to also for the amount of shrinkage/theft/destroyed goods etc.. In addition, to valuate the inventory is a must. For example, oil today isn't the same value as it will be next week, much less in a year. Thus the need for adjustments. Add to that a blended value for FIFO or LIFO you can see why an adjustment is needed. Hope this helps.

Thanks and next time I will give my answers to the questions. It was an homework question that did get correct. I just wanted to see what your response to the question would be to get a different opinon. But I do apologize.

[morgaine300]

Not a problem. It's nice when someone actually pays attention. :-)

[Suhail_Majeed]

Rent account 7500

Rent outstanding 2500

[pready]

This is an old thread, so why are you adding on. You need to start your own thread with a proper question and what you have done to answer the question, so that we can help you.