Juan Morales Company had the following account balances at year-end: Cost of Goods Sold $60,870; Inventory $15,950; Operating Expenses $32,930; Sales Revenue $119,650; Sales Discounts $1,260; and Sales Returns and Allowances $1,900. A physical count of inventory determines that merchandise inventory on hand is $12,280.

Prepare closing entries. (Credit account titles are automatically indented when amount is enter Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit 119650 Sales Revenue 1260 Sales Discounts (To close accounts with credit balances) 1900 Sales Returns and Allov T Cost of Goods sold 64540 32930 Operating Expenses TRetained Earnings (To close accounts with debit balances) (To close net income (loss))