Make journal entries to close balance in temporary revenue

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Reference no: EM131532928

Question: Refer to QS 5-6 and prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage that is made to solve QS 5-6.

QS 5-6: 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 . . . . . . . . $ 34,800

Sales returns and allowances . . . . . . . . . . . $ 3,500

T. Nix, Capital . . . . . . . . . . . . . . . 115,300

Cost of goods sold . . . . . . . . . . . . . . . . . 102,000

T. Nix, Withdrawals . . . . . . . . . . 7,000

Depreciation expense . . . . . . . . . . . . . . . 7,300

Sales . . . . . . . . . . . . . . . . . . . . . . . 157,200

Salaries expense . . . . . . . . . . . . . . . . . . . 29,500

Sales discounts . . . . . . . . . . . . . . 1,700

Miscellaneous expenses . . . . . . . . . . . . . 2,000

A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $32,900. Prepare the entry to record any inventory shrinkage.

Reference no: EM131532928

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