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 $ 40,800 Sales returns and allowances $ 5,900 Retained earnings 121,300 Cost of goods sold (excluding shrinkage) 106,800 Dividends 7,000 Depreciation expense 10,900 Sales 159,000 Salaries expense 35,500 Sales discounts 3,500 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 $39,350.

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