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Merchandise Inventory account shows an unadjusted balance of $31,530. With no shrinkage - due to theft or errorthe business should have inventory costing $301,530. But on December 31, Physical counts of the inventory an hand, showed the total cost comes to only $301,350.. What is the adjusting entry. Select one: a. Debit: Cost of Goods Sold 180 Credit: Inventory Shrinkage 180 b. Debit: Inventory Shrinkage 240 Credit: Cost of Goods Sold 240 c. Debit: Cost of Goods Sold 180 Credit: Merchandise Inventory 180 d. Debit: Cost of Goods Sold 240 Credit: Inventory Shrinkage 240