Required informationSkip to question [The following information applies to the questions displayed below.] 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$45,800 Sales returns and allowances$4,900T. Nix, Capital 131,300 Cost of goods sold 109,800T. Nix, Withdrawals 7,000 Depreciation expense 11,900Sales 162,600 Salaries expense 40,500Sales discounts 4,500 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 $43,850. Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage from QS 5-9. (The solution from QS 5-9 is required to complete this question.)

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Description: Required informationSkip to question [The following information applies to the questions displayed below.] 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 pe

Perpetual inventory system is a method in which a company maintains records of its inventory by…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

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	$	45,800	Sales returns and allowances	$	4,900
T. Nix, Capital		131,300	Cost of goods sold		109,800
T. Nix, Withdrawals		7,000	Depreciation expense		11,900
Sales		162,600	Salaries expense		40,500
Sales discounts		4,500	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 $43,850.

Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage from QS 5-9. (The solution from QS 5-9 is required to complete this question.)

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