1. record the entry to close the income statement accounts with debit balances

2. record the entry to close the income statement accounts with credit balances

3. record the adjustment for inventory shrikage based on physical count

1 7 Required information Use the following information for Quick Studies below. (Algo) [The following information applies to the questions displayed below.) Nix'it Company's ledger on July 31, its fiscal year-end, includes the following selected accounts that (Nlx'It uses the perpetual inventory system). Part 1 of 2 5 points 8 03:39:51 Merchandise inventory Retained earnings Dividends Sales Sales discounts $ 44,380 Sales returns and allowances 128,300 Cost of goods sold 7,000 Depreciation expense 161, 100 Salaries expense 4,200 Miscellaneous expenses $ 5,200 108,900 11,60e 39,000 5,000 A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory $42,500. QS 4-12 (Algo) Closing entries LO P3 Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to co shrinkage from QS 4-11