Zurich Companys perpetual inventory records indicate that $1,380,000 of merchandise should be on hand on August 31,

Question:

Zurich Company’s perpetual inventory records indicate that $1,380,000 of merchandise should be on hand on August 31, 2012. The physical inventory indicates that $1,315,900 of merchandise is actually on hand. Journalize the adjusting entry for the inventory shrinkage for Zurich Company for the year ended August 31, 2012. Assume that the inventory shrinkage is a normal amount.