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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.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Closing Entries
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