Question

2) Oin Shops Unlimited's unadjusted Merchandise Inventory at December 31, 2019 was 59,000. The cost associated with the physical count of inventory on hand on December 31, 2019 was $8,200. In addition, Gift Shops Unlimited estimated approximately $1000 of merchandise sold on account will be returned with a cost of $550. Assume a perpetual inventory system is used. 5 points Requirements: 1. Journalize the adjustment for inventory shrinkage. Omit explanation. 2.Journalize the adjustment for estimated sales returns. Omit explanation. DEBIT CREDIT

Answer 1

Reuirement 1 Journalise the adjustment Inventory shrinkage Account Titles and Explanation Jun-30 Cost of Goods Sold Merchandise Inventory (To record the adjustment for inventory shrinkage) Inventory Shrinkage=$9000-$8200=$800 Debit Date Credit $ 800 800 Reuirement 2 Journalise the adjustment for estimated sales reutrns: Debit Account Titles and Explanation Credit Date Jun-30 Sales return and allowances $ 1,000 $ 1,000 Accounts Receivable (To record estimated returns for the year) Jun-30 Merchandise Inventory $ 550 Cost of goods sold (To record cost of estimated returns for the year) 550