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 $ 42,300 Sales returns and allowances $ 5,600 Retained earnings 124,300 Cost of goods sold 107,700 Dividends 7,000 Depreciation expense 11,200 Sales 159,100 Salaries expense 37,000 Sales discounts 3,800 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 $40,700. Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage from QS 4-9. (The solution from QS 4-9 is required to complete this question.) Solution is 1,600

• Record the entry to close the income statement accounts with credit balances

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
July 31

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Journal entry worksheet

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• Record the entry to close the income statement accounts with debit balances.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
July 31