Blue Company had the following account balances at year-end: Cost of Goods Sold $61,350; Inventory $17,960; Operating Expenses $32,910; Sales Revenue $124,050; Sales Discounts $1,490; and Sales Returns and Allowances $2,110. A physical count of inventory determines that merchandise inventory on hand is $12,520. (a) Prepare the adjusting entry necessary as a result of the physical count. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit