Castle Furnishings Companys perpetual inventory records indicate that $675,400 of merchandise should be on hand on November 30, 2019. The physical inventory indicates that $663,800 of merchandise is actually on hand.

Journalize the adjusting entry for the inventory shrinkage for Castle Furnishings Company for the year ended November 30, 2019. Assume that the inventory shrinkage is a normal amount. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Castle Furnishings Company

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
125	Notes Receivable
130	Merchandise Inventory
131	Estimated Returns Inventory
140	Office Supplies
141	Store Supplies
142	Prepaid Insurance
180	Land
192	Store Equipment
193	Accumulated Depreciation-Store Equipment
194	Office Equipment
195	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
216	Salaries Payable
218	Sales Tax Payable
219	Customers Refunds Payable
220	Unearned Rent
221	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Rent Revenue

	EXPENSES
510	Cost of Merchandise Sold
521	Delivery Expense
522	Advertising Expense
524	Depreciation Expense-Store Equipment
525	Depreciation Expense-Office Equipment
526	Salaries Expense
531	Rent Expense
533	Insurance Expense
534	Store Supplies Expense
535	Office Supplies Expense
536	Credit Card Expense
539	Miscellaneous Expense
710	Interest Expense

Journalize the adjusting entry for the inventory shrinkage for Castle Furnishings Company for the year ended November 30, 2019. Assume that the inventory shrinkage is a normal amount. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3