chapter 6 question 3

Instructions Paragon Tire Co.'s perpetual inventory records indicate that $2,725,100 of merchandise should be on hand on March 31, 2049. The physical inventory indicates that $2,669,400 of merchandise is actually on hand. Journalize the adjusting entry for the inventory shrinkage for Paragon Tire Co. for the year ended March 31, 2049. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. nart of Accounts CHART OF ACCOUNTS Paragon Tire Co. General Ledger ASSETS REVENUE 110 Cash 410 Sales 120 Accounts Receivable 610 Interest Revenue 125 Notes Receivable 130 Merchandise Inventory EXPENSES 131 Estimated Returns Inventory 510 Cost of Merchandise Sold 140 Office Supplies 521 Delivery Expense 141 Store Supplies 522 Advertising Expense 142 Prepaid Insurance 524 Depreciation Expense-Store Equipment 180 Land 525 Depreciation Expense-Office Equipment 192 Store Equipment 526 Salaries Expense 193 Accumulated Depreciation-Store Equipment 531 Rent Expense 194 Office Equipment 533 Insurance Expense 195 Accumulated Depreciation Office Equipment 534 Store Supplies Expense 535 Office Supplies Expense LIABILITIES 536 Credit Card Expense 210 Accounts Payable 539 Miscellaneous Expense 216 Salaries Payable 710 Interest Expense 218 Sales Tax Payable 219 Customer Refunds Payable 221 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing Journalize the adjusting entry for the inventory shrinkage for Paragon Tire Co. for the year ended March 31, 2049. Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3