Refer to QS 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.
In QS, Crystal Company€™s ledger on July 31, its fiscal year-end includes the following selected accounts that have normal balances (Crystal uses the perpetual inventory system).

A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $40,600. Prepare the entry to record any inventory shrinkage.

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7,600 115,000 12,000 45,000 7,000 Merchandise inventory 42,000 Sales returns and allowances 50,000 74,900 Cost of goods sold Depreciation expense- Retained earnings Sales . _ .. 275,300 Salaries expense 5,200 Miscellaneous expenses