United Rug Company is a small rug retailer owned and operated by Pat Kirwan. After the accounts have been adjusted on December 31, the following selected account balances were taken from the ledger:

Advertising Expense	$ 36,000
Depreciation Expense	13,000
Dividends	65,000
Freight In	17,000
Inventory, January 1	375,000
Inventory, December 31	460,000
Miscellaneous Expense	9,000
Purchases	1,760,000
Purchases Discounts	35,000
Purchases Returns and Allowances	45,000
Salaries Expense	375,000
Sales	2,220,000

The estimated cost of merchandise returns from December sales is $20,000.

Journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

United Rug Company

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
125	Notes Receivable
130	Inventory
131	Estimated Returns Inventory
140	Office Supplies
141	Store Supplies
142	Prepaid Insurance
180	Land
192	Store Equipment
193	Accumulated Depreciation-Store Equipment
194	Office Equipment
195	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
216	Salaries Payable
218	Sales Tax Payable
219	Customer Refunds Payable
220	Unearned Rent
221	Notes Payable
	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends
313	Income Summary

	REVENUE
410	Sales
610	Rent Revenue
	EXPENSES
510	Purchases
511	Purchases Returns and Allowances
512	Purchases Discounts
513	Freight In
521	Delivery Expense
522	Advertising Expense
523	Depreciation Expense
526	Salaries Expense
531	Rent Expense
533	Insurance Expense
534	Store Supplies Expense
535	Office Supplies Expense
536	Credit Card Expense
539	Miscellaneous Expense
710	Interest Expense

Journalize the closing entries on December 31. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
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