Requlred Informetlon Nix\'It Company\'s ledger on July 31, its fiscal year-end,
ID: 2330542 • Letter: R
Question
Requlred Informetlon Nix'It Company's ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix'it uses the perpetual inventory system Merchandise inventory Retained earnings Dividends Sales Sales discounts $5,58e 188,8ee 11,388 37,588 5,8e8 $42,88e Sales returns and allowances Cost of goods sold 125, 3 7,98e Depreciation expense 159,68e Salaries expense 3,98e Miscellaneous expenses A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $41150. Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage. View transaction list Journal entry worksheet Record the entry to close the temporary revenue and accounts with credit balances. Note: Enter debits before credits. Date General Journal Debit Credit July 31 Record entry Clear entry View general journalExplanation / Answer
(1).
Date
Accounts Title & Explnation
Debit
Credit
July 31
Sales
$159600
Income Summary
$159600
(For closing sales account)
(2).
Date
Accounts Title & Explnation
Debit
Credit
July 31
Cost of Goods Sold ($42800 - $41150)
$1650
Merchandise Inventory
$1650
(For recording inventory shrinkage)
July 31
Income Summary
$172850
Sales discounts
$3900
Sales returns & allowances
$5500
Cost of goods sold
$109650
Depreciation expense
$11300
Salaries expenses
$37500
Miscellaneous expenses
$5000
(For recording closing of temporary accounts)
July 31
Retained earnings
$7000
Dividends
$7000
(For closing dividends account)
Date
Accounts Title & Explnation
Debit
Credit
July 31
Sales
$159600
Income Summary
$159600
(For closing sales account)
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