Beginning inventory is 100 units. We sell 30 units and purchase 20. Ending Inventory is 85 units. What is the Shrinkage?

5 units

Explanation:

Shrinkage is the difference between the closing balance physically available after a count and and the expected closing balance considering the Opening inventory, sales and purchases for the period.

Given the following information;

Opening inventory = 100 units

Sales = 30 units

Closing inventory = 85 units

Purchases = 20 units

Expected closing balance = Opening balance - Sales + purchases

= 100 - 30 + 20

= 90 units

Shrinkage = 90 - 85

= 5 Units