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Valley Company's adjusted account balances from its general ledger 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.

$\backslash$table$[[$Adjusted Account Balances,Debit,Credit$],[$Merchandise inventory $($ending$),$$$32,000,],[$Other $($non$-$inventory$)$ assets,$128,000,],[$Total liabilities,,$$36,960$

Required:

Prepare closing entries as of August $31($the perpetual inventory system is used$).$

Journal entry worksheet

$1$

$2$

$3$

$4$

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

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$August $31,$Sales,$218,880,],[,$Income summary,,$218,880],[.,P,,],[,,,],[,=,,],[,,,]]$

$2$

$3$

$4$

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

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$August $31,$Income summary,,$],[,$Sales discounts,,$3,349],[,$Sales returns and allowances,,$14,446],[,$Cost of goods sold,,$85,312],[,$Sales salaries expense,,$29,987],[,$Rent expense$-$Selling space,,$10,287],[,$Store supplies expense,,$2,627],[$Advertising expense,,$18,605,],[,$Office salaries expense,,$27,360],[$Rent expense$-$Office space,,$2,627,],[$Office supplies expense,,$876,],[,,,]]$

Journal entry worksheet

$(1)$

$2$

Record the entry to close income summary.

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$August $31],[,,,],[,,,],[,,,],[-,,,],[,,,]]$

$7$ of $29$