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 $ 37,800 Sales returns and allowances $ 6,500 Retained earnings 115,300 Cost of goods sold 105,000 Dividends 7,000 Depreciation expense 10,300 Sales 160,200 Salaries expense 32,500 Sales discounts 4,700 Miscellaneous expenses 5,000 A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $35,900. Prepare journal entries to close the balances in temporary revenue and expense accounts. 1. Record the entry to close the income statement accounts with credit balances. 2. Record the entry to close the income statement accounts with debit balances.
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 $ 37,800 Sales returns and allowances $ 6,500 Retained earnings 115,300 Cost of goods sold 105,000 Dividends 7,000 Depreciation expense 10,300 Sales 160,200 Salaries expense 32,500 Sales discounts 4,700 Miscellaneous expenses 5,000 A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $35,900. Prepare journal entries to close the balances in temporary revenue and expense accounts. 1. Record the entry to close the income statement accounts with credit balances. 2. Record the entry to close the income statement accounts with debit balances.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 37E: Analyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following...
Related questions
Topic Video
Question
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 | $ | 37,800 | Sales returns and allowances | $ | 6,500 | |
| 115,300 | Cost of goods sold | 105,000 | ||||
| Dividends | 7,000 | 10,300 | ||||
| Sales | 160,200 | Salaries expense | 32,500 | |||
| Sales discounts | 4,700 | Miscellaneous expenses | 5,000 | |||
A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $35,900.
Prepare journal entries to close the balances in temporary revenue and expense accounts.
1. Record the entry to close the income statement accounts with credit balances.
2. Record the entry to close the income statement accounts with debit balances.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
College Accounting, Chapters 1-27 (New in Account…
Accounting
ISBN:
9781305666160
Author:
James A. Heintz, Robert W. Parry
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning