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	$	37,800	Sales returns and allowances	$	6,500
T. Nix, Capital		115,300	Cost of goods sold (excluding shrinkage)		105,000
T. Nix, Withdrawals		7,000	Depreciationexpense		10,300
Sales		160,200	Salaries expense		32,500
Sales discounts		4,700	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 $35,900.

Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage.

Record the entry to close the temporary expense and accounts with debit balances.