Nixâ€™It Companyâ€™s ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nixâ€™It uses the perpetual inventory system). Merchandise inventory$ 41,300 Sales returns and allowances$5,800 Retained earnings122,300 Cost of goods sold (excluding shrinkage)107,100 Dividends7,000 Depreciation expense11,000 Sales158,800 Salaries expense36,000 Sales discounts3,600 Miscellaneous expenses5,000 A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $39,800. Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage.
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