Problem 4-4A Preparing closing entries and Interpreting information about discounts and returns LO C2, P3 Valley Company's adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expense-selling space, store supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative. Debit Merchandise inventory (ending) $ 40,600 Credit Other (noninventory) assets Total liabilities 59,650 Common stock $ 24,100 15, 200 Retained earnings 19,000 Dividends 8,000 Sales 227,000 Sales discounts 2,200 Sales returns and allowances 12,500 Cost of goods sold " 74,200 Sales salaries expense 31,800 Rent expense-Selling space 8,800 Store supplies expense 1,700 Advertising expense 12,500 office salaries expense 29,300 Rent expense-Office space 3,700 office supplies expense 350 Totals $285,300 $285,300 Beginning merchandise inventory was $25,600. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. Invoice cost of merchandise purchases $92,200 Purchases discounts received 3,000 Purchases returns and allowances 4,600 Costs of transportation-in 4,600 Required: Prepare closing entries as of August 31 (the perpetual inventory system is used). View transaction list Journal entry worksheet 1 2 3 4 Record the entry to close the income statement accounts with credit balances.