The balance in the Merchandise Inventory account at the end of the year is $60,000, but the physical inventory count at the end of the year is $50,000. The adjusting entry required on December 31 (end of the year) for this inventory shrinkage is O debit Cost of Merchandise Sold, $50,000, credit Merchandise Inventory $50.000 debit Cost of Merchandise Sold, $10,000; credit Merchandise Inventory, $10,000 O debit Merchandise Inventory, $50,000, credit Cost of Merchandise Sold. $50,000 O debit Merchandise Inventory, $10,000; credit Cost of Merchandise Sold $10,000