Using adjustment data listed in E4-15, indicate the effects the inventory shrinkage adjustment on the liquidity metric working capital and profitability metric gross profit percent.

E4-15

Intrax Inc.'s perpetual inventory records indicate that $815,400 of merchandise should be on hand on December 31, 20Y4. The physical inventory indicates that $798,300 of merchandise is actually on hand. Illustrate the effects on the accounts and financial statements of the inventory shrinkage for Intrax Inc. for the year ended December 31, 20Y4.