Flint Company had the following account balances at year-end: Cost of Goods Sold $64,950; Inventory $14,340; Operating Expenses $29,600; Sales Revenue $122,540; Sales Discounts $1,100; and Sales Returns and Allowances $1,970. A physical count of inventory determines that merchandise inventory on hand is $12,520. Collapse question part (a) Prepare the adjusting entry necessary as a result of the physical count.

Cost of goods sold $1,820

To Inventory $1,820

(Being the physical count is recorded)

Explanation:

The journal entry is shown below:

Cost of goods sold $1,820

To Inventory $1,820

(Being the physical count is recorded)

The computation is shown below:

= $14,340 - $12,520

= $1,820

For recording this journal entry we debited the cost of goods sold and credited the inventory so that the physical count could be recorded i. e difference of amount