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Valley Companys adjusted trial balance on August 31, 2017, its fiscal year-end, follows. Debit Credit Merchandise inventory $ 40,200 Other (noninventory) assets 61,440 Total liabilities
Valley Companys adjusted trial balance on August 31, 2017, its fiscal year-end, follows.
Debit | Credit | ||||||
Merchandise inventory | $ | 40,200 | |||||
Other (noninventory) assets | 61,440 | ||||||
Total liabilities | $ | 25,300 | |||||
Common stock | 16,640 | ||||||
Retained earnings | 20,800 | ||||||
Dividends | 8,600 | ||||||
Sales | 226,300 | ||||||
Sales discounts | 2,250 | ||||||
Sales returns and allowances | 13,500 | ||||||
Cost of goods sold | 75,000 | ||||||
Sales salaries expense | 32,100 | ||||||
Rent expenseSelling space | 8,200 | ||||||
Store supplies expense | 1,700 | ||||||
Advertising expense | 12,500 | ||||||
Office salaries expense | 29,800 | ||||||
Rent expenseOffice space | 3,300 | ||||||
Office supplies expense | 450 | ||||||
Totals | $ | 289,040 | $ | 289,040 | |||
On August 31, 2016, merchandise inventory was $25,900. Supplementary records of merchandising activities for the year ended August 31, 2017, reveal the following itemized costs.
Invoice cost of merchandise purchases | $ | 92,400 |
Purchases discounts received | 2,600 | |
Purchases returns and allowances | 5,000 | |
Costs of transportation-in | 4,500 | |
|
Required:
1. Prepare closing entries as of August 31, 2017 (the perpetual inventory system is used).
- Record the entry to close the income statement accounts with credit balances.
- Record the entry to close the income statement accounts with debit balances.
- Record the entry to close Income summary.
- Record the entry to close the dividends account.
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