Question: Frisbee Hardware uses a perpetual inventory system. At year-end, the Inventory account has a balance of $250,000, but a physical count shows that the merchandise

Frisbee Hardware uses a perpetual inventory system. At year-end, the Inventory account has a balance of $250,000, but a physical count shows that the merchandise on hand has a cost of only $246,000.

a. Explain the probable reason(s) for this discrepancy.

b. Prepare the journal entry required in this situation.

c. Indicate all the accounting records to which your journal entry in part b should be posted.

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