Telo Company's ledger on July 31, its fiscal year-end, shows merchandise inventory of $42,300 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 $40,700. Prepare the entry to record any inventory shrinkage. View transaction list Journal entry worksheet Record the adjustment for inventory shrinkage based on physical count. The company uses the perpetual inventory system. Note: Enter debits before credits. General Journal Debit Credit Date July 31 Record entry Clear entry View general journal