Juan Morales Company had the following account balances at year-end: Cost of Goods Sold $60,000; Inventory $15,000; Operating Expenses $29,000; Sales Revenue $115,000; Sales Discounts $1,200; and Sales Returns and Allowances $1,700. A physical count of inventory determines that merchandise inventory on hand is $13,900. Instructions (a) Prepare the adjusting entry necessary as a result of the physical count. (b) Prepare closing entries. SOLUTION (3) Cost of Goods Sold ................................................................. 1,100 Inventory 1,100