Question

The records of Penny Co. indicated that $397,150 of merchandise should be on hand on December 31. The physical inventory indicates that $393,973 of merchandise is actually on hand.

Required:

Chart of Accounts

General Journal

PAGE 1

JOURNAL

1

2

 

Journalize the adjusting entry for the merchandise inventory shrinkage for the year ended December 31. Refer to the Chart of Accounts for exact wording of account titles.