Here is my problem. I am aware of how to do these entries, but my on hand merchandise counted at the end of the year is more from prior period.
My merchandise on hand is 192,593. My prior period balance is 101,681.
So I came up with this entry:

Purchases Disc.
Purchase returns
COGS
Inventory
Purchases
Freight In

My book however says that the inventory should be a credit balance. Not sure what to do here or if my journal entry could be right.