(Closing Entries) The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end of its fiscal year, October 31, 2005: Sales $800,000, Freight-out $12,000, Sales Returns and Allowances $24,000, and Sales Discounts $15,000.

Instructions

(a) Prepare the sales revenue section of the income statement.

(b) Prepare separate closing entries for (1) sales and (2) the contra accounts to sales.