Question

St. Book​ Shop's unadjusted Merchandise Inventory at June ​30, 2018 was $ 5 comma 600. The cost associated with the physical count of inventory on hand on June ​30, 2018​, was $ 5 comma 500. In​ addition, Morgan St. Book Shop estimated approximately $ 1 comma 200 of merchandise sold will be returned with a cost of $ 550.

Journalize the adjustment for inventory shrinkage.

Answer 1

For Morgan St. Book Shop, the journal entry to adjust for inventory shrinkage involves debiting Cost of Goods Sold and crediting Merchandise Inventory by $650, which is the difference between the unadjusted inventory and the physical count.

Step-by-step explanation:

The student's question involves journalizing the adjustment for inventory shrinkage for Morgan St. Book Shop. The unadjusted inventory was $5,600, and the physical inventory count showed $5,500 on June 30, 2018.

An estimated $1,200 in sales is expected to be returned, which had a cost of $550. To adjust for inventory shrinkage, the following journal entry is needed:

Dr. Cost of Goods Sold $650
Cr. Merchandise Inventory $650

This entry reflects the difference between the physical count amount and the unadjusted inventory value, indicating a loss of inventory (shrinkage).

Answer 2

Inventory shrinkage is the shortage of inventory in physical count when compared with the system records.

Step-by-step explanation:

Write down the values given in the question

St. Book​ Shop's unadjusted Merchandise Inventory at June ​30, 2018 was $ 5 comma 600.

he cost associated with the physical count of inventory on hand on June ​30, 2018​, was $ 5 comma 500.

Morgan St. Book Shop estimated approximately $ 1 comma 200 of merchandise sold will be returned with a cost of $ 550.

the adjustment for inventory shrinkage is explained in the table attached

The amount that is credited and debited are are found by following the

Note : Inventory shrinkage is the shortage of inventory in physical count when compared with the system records.