Question

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, advertising expense. It categorizes the remaining expenses as general and administrative. Merchandise inventory(ending) Other (noninventory) assets Total liabilities K. Valley, Capital K. Valley, Withdrawals Sales Sales discounts Sales returns and allowances Cost of goods sold Sales salaries expense Rent expense-Selling space Store supplies expense Advertising expense Office salaries expense Rent expense-Office space Office supplies expense Totals Debit Credit $ 41,000 130,400 $ 25,000 104,550 8,000 225,600 2,250 12,000 74,500 32,000 8,000 1,500 13,000 28,500 3,600 400 $355,150 $355,150 Beginning merchandise inventory was $25,400. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. Invoice cost of merchandise purchases Purchases discounts received Purchases returns and allowances Costs of transportation-in $ 92,000 2,000 4,500 4,600 Required: Prepare closing entries as of August 31 (the perpetual inventory system is used).

*This all is one question

Answer 1

Date	General Journal	Debit	Credit
Aug 31	Sales	225600
	Income Summary		225600
Aug 31	Income Summary	175750
	Sales discounts		2250
	Sales returns and allowances		12000
	Cost of goods sold		74500
	Sales salaries expense		32000
	Rent expense—Selling space		8000
	Store supplies expense		1500
	Advertising expense		13000
	Office salaries expense		28500
	Rent expense—Office space		3600
	Office supplies expense		400
Aug 31	Income Summary	49850		=225600-175750
	K. Valley, Capital		49850
Aug 31	K. Valley, Capital	8000
	K. Valley, Withdrawals		8000