QS 4-14 (Static) Accounting for shrinkage-perpetual system LO P3 Telo Company's ledger on July 31, its fiscal year-end, shows merchandise inventory of $37,800 before accounting for any shrinkage. A physical count of its July 31 year-end inventory discloses that the cost of the merchandise Inventory still available is $35,900. Prepare the entry to record any inventory shrinkage. View transaction list Journal entry worksheet 1 Record the adjustment for inventory shrinkage based on physical count. The company uses the perpetual Inventory system. Note: Enter debits before credits Debit Credit General Journal Date July 31 View general journal Clear entry Record entry