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 $ 40,300 Sales returns and allowances $ 6,000 T. Nix, Capital 120,300 Cost of goods sold 106,500 T. Nix, Withdrawals 7,000 Depreciation expense 10,800 Sales 159,200 Salaries expense 35,000 Sales discounts 3,400 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 $38,900. Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage from QS 5-9.
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 $ 40,300 Sales returns and allowances $ 6,000 T. Nix, Capital 120,300 Cost of goods sold 106,500 T. Nix, Withdrawals 7,000 Depreciation expense 10,800 Sales 159,200 Salaries expense 35,000 Sales discounts 3,400 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 $38,900. Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage from QS 5-9.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 | $ | 40,300 | Sales returns and allowances | $ | 6,000 | |
| T. Nix, Capital | 120,300 | Cost of goods sold | 106,500 | |||
| T. Nix, Withdrawals | 7,000 | 10,800 | ||||
| Sales | 159,200 | Salaries expense | 35,000 | |||
| Sales discounts | 3,400 | 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 $38,900.
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