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7 November, 06:16

The records of penny Co. Indicated that 415,000 of merchandise should be on hand December 31. The phyiscla inventory indicates that 370,000 of merchandise is actually on hand

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  1. 7 November, 09:09
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    See explanation section

    Explanation:

    As there is a difference between the physical count of the inventory and actual Inventory count, it indicates that the merchandise inventory is either sold or wasted. However, for continuing the operation smoothly, it is assumed as sold. Therefore, the journal entry to record the sale is -

    December - 31 Cost of goods sold Debit 45,000

    ($415,000 - $370,000)

    Merchandise Inventory Credit 45,000

    (To record the sale of merchandise: adjusted)
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