The Inventory account for Brady Company had a balance of $137,900 at the end of its fiscal

Question:

The Inventory account for Brady Company had a balance of $137,900 at the end of its fiscal year. A physical count taken at year end revealed that the value of inventory on hand amounted to $136,400.
Requirements
1. Journalize the adjustment for inventory shrinkage.
2. What could cause the inventory balance according to the physical count to be different from the ledger balance?