ILLUSTRATION 2 Following is a summary of result in physical verification of stores: Material Code Physical balance Stores ledger Average cost Reasons per (units) balance (units) unit $ 1 200 205 2 Normal shrinkage resulting from storage and material issue. 2 2 60 60 3 Material is now obsolete and the total quantity has since been sold for $100 3 500 550 1 Shortage is due to theft. 14 550 400 2 A receipt of 100 units was not recorded in the stores ledger and its control account. The balance is due to errors in issuing from stores. 15 100 120 20 units returned to supplier not recorded. Original invoice cost was $3 per unit and current standard cost $2.50 per unit 6 600 640 13 Discrepancy is due to carelessness in stock-taking. Prepare journal entries, where necessary, to record the adjustment in the Cost Ledger and state how you would adjust the accounts, where necessary, in the subsidiary stores ledger