Dog-eared Book Shop’s accounts at June 30, 2016, included the following unadjusted balances:
Merchandise Inventory....$ 5,800
Cost of Goods Sold....... 33,750
Sales Revenue.......... 75,000
Sales Discounts....... 1,100
Sales Returns and Allowances .... 2,500
The cost associated with the physical count of inventory on hand on June 30, 2016, was $5,300.
Requirements
1. Journalize the adjustment for inventory shrinkage.
2. Compute the gross profit.