Telo Company's ledger on July 31, its fiscal year-end, shows merchandise inventory of $47,800 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 $45,650. 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.