Problem
Lakelands Shop had a beginning balance in merchandise inventory of $2,600. Purchases for the year totaled $1,200, and cost of goods sold totaled $1,700. If the physical count of merchandise inventory at the end of the year indicated that $1,990 of inventory was on hand, how much was inventory shrinkage for the year? Prepare the journal entry to record the inventory shrinkage for the fiscal year ended September 30, 2015.