Telo Companys ledger on July 31, its fiscal year-end, shows merchandise inventory of $37,800 before accounting for

Question:

Telo Company’s ledger on July 31, its fiscal year-end, shows merchandise inventory of $37,800 before accounting for any shrinkage. A physical count of its July 31 year end inventory discloses that the cost of the merchandise inventory still available is $35,900. Prepare the entry to record any inventory shrinkage.