Juan Morales Company had the following account balances at year-end: Cost of Goods Sold $60,100; Inventory $14,110; Operating Expenses $29,100; Sales Revenue $118,100; Sales Discounts $1,010; and Sales Returns and Allowances $1,610. A physical count of inventory determines that merchandise inventory on hand is $12,110. (a) Prepare the adjusting entry necessary as a result of the physical count. (b) Prepare closing entries.