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NixIt Companys ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (NixIt uses the perpetual inventory system).

Merchandise inventory	$ 42,300	Sales returns and allowances	$ 5,600
Retained earnings	124,300	Cost of goods sold	107,700
Dividends	7,000	Depreciation expense	11,200
Sales	159,100	Salaries expense	37,000
Sales discounts	3,800	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 $40,700.

QS 4-12 (Algo) Closing entries LO P3

Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage from QS 4-11.

Journal entry worksheet Record the entry to close the income statement accounts with credit balances Note: Enter debits before credits. Journal entry worksheet Record the entry to close the income statement accounts with debit balances. Note: Enter debits before credits