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 | $ 34,800 | Sales returns and allowances | $ 3,500 |
T. Nix, Capital | 115,300 | Cost of goods sold | 102,000 |
T. Nix, Withdrawals | 7,000 | Depreciation expense | 7,300 |
Sales | 157,200 | Salaries expense | 29,500 |
Sales discounts | 1,700 | Miscellaneous expenses | 2,000 |
A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $32,900. Prepare the entry to record any inventory shrinkage.
Prepare journal entries to close the balances in temporary revenue and expense accounts.
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