Problem 5-4A Preparing closing entries and interpreting information about discounts and returns LO C2, P3 Valley Company's adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expense-selling space, store supplies expense, advertising expense. It categorizes the remaining expenses as general and administrative. Credit Debit $ 41,900 41,980 $ 24,400 19, 200 8,600 226,000 Merchandise inventory (ending) Other (noninventory) assets Total liabilities K. Valley, Capital K. Valley, Withdravals Sales Sales discounts Sales returns and allowances Cost of goods sold Sales salaries expense Rent expense-Selling space Store supplies expense Advertising expense Office salaries expense Rent expense-Office space Office supplies expense Totals 2,270 13,000 74,000 31, 700 8, 200 1,600 12,500 29,800 3,700 350 $269,600 $269,600 Beginning merchandise inventory was $25,700. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. Invoice cost of nerchandise purchases Purchases discounts received Purchases returns and allowances Costs of transportation-in $91, 700 2,000 4,400 4,900 Required: Prepare closing entries as of August 31 (the perpetual inventory system is used)