E4-25: Adjusting entry for merchandise inventory shrinkage

Intrax Inc.s perpetual inventory records indicate that $815,400 of merchandise should be on hand on December 31, 20Y4. The physical inventory indicates that $798,300 of merchandise is actually on hand. Illustrate the effects on the accounts and financial statements of the inventory shrinkage for Intrax Inc. for the year ended December 31, 20Y4.