1. The Tuck Shop began the current month with inventory costing $25,000, then purchased inventory at a cost of $65,000. The perpetual inventory system indicates that inventory costing $60,000 was sold during the month for $100,000. If an inventory count shows that inventory costing $25,000 is actually on hand at month-end, what amount of shrinkage occurred during the month?

A. $500. B. $5,000. C. $14,495. D. $15,000

2.In 2014, Lawrence Company had gross sales of $1,010,000 on account and granted sales discounts of $10,000. On January 1, 2014, the Allowance for Doubtful Accounts had a credit balance of $20,000. During 2014, $30,000 of uncollectible accounts receivable were written off. Past experiences indicate that 3% of net credit sales become uncollectible. Using the percentage of credit sales method, what would be the adjusted balance in the Allowance for Doubtful Accounts at December 31, 2014?

A. $20,000 B. $50,000 C. $30,000 D. $35,000