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The inventory records of Garden Company indicate that $92,300 of merchandise should be on hand at the end of the month. The physical inventory indicates that $89,900 is actually on hand. The journal entry to adjust inventory shrinkage will include a.a debit to Cost of Merchandise Sold for $2,400. b.a debit to Merchandise Inventory of $2,400. c.a debit to Merchandise Inventory for $89,900. d.None of these choices, since no journal entry is needed.

Answer :

Answer:

The correct option is A

Explanation:

As the records of the inventory showing $92,300 amount of inventory or merchandise which on hand at the month end but the physical count of the inventory states $89,900 amount of inventory or merchandise on hand. So, on order to adjust the shrinkage, the entry to debit the Cost of the merchandise sold amounts to $2,400 is to be recorded or passed.

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