Chapter 5 Adjusting entries eBook Show Me How Hahn Flooring Company uses a perpetual inventory system. Journalize the December 31 adjusting entries based upon the following: a. The inventory account has a balance of $1,333,150, while physical inventory indicates that $1,309,900 of merchandise is on hand. Assume any shrinkage is a normal amount. If an amount box does not require an entry, leave it blank. Dec. 31 Cost of Goods Sold 23,250 Inventory 23,250 b. Sales refunds and allowances of $125,000 and merchandise returns of $80,000 are estimated for the current year's sales. If an amount box does not require an entry, leave it blank. Dec. 31 > 56F Search LO LW C Cloudy