QS 5-6 Accounting for shrinkage - perpetual system Nix'It Company's ledger on July 31, its financial year-end, includes the following selected accounts that have normal balances (Nix'It uses the perpetual inventory system). Merchandise inventory ........ $ 34,800 T. Nix, Capital ...... 115,300 Sales returns and allowances... Cost of goods sold $ 3,500 102,000 T. Nix, Withdrawals Sales....... Sales discounts.. 7,000 Depreciation expense.. 7,300 157,200 Salaries expense 29,500 1,700 Miscellaneous expenses. 2,000 A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $32,900. Prepare the entry to record any inventory shrinkage. QS 5-7 Closing entries Refer to QS 5-6 and prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage that is made to solve QS 5-6.