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Thompson Company maintains perpetual inventory records. Thompson determined through a physical count that it had $10,300 of merchandise inventory on hand at the end of the accounting period. The balance in the Merchandise Inventory account in the general ledger was $10,700.
Problem 1: The impact of the adjusting entry on the financial statements is
a. Merchandise Inventory increased $400b. Cost of Goods Sold increased $400c. Gross margin increased $400d. Cash flow for operating activities decreased $400
direct materials ...standard quantity of hrs 4.6lbs...standard price 2.50 per pound...standard cost 11.50 direct
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