80.2K

Verified Solution

Link Copied!

Valley Company$$s adjusted account balances from its general ledger on August $31,$ its fiscal year$-$end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expense$$selling space, store supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative.

Adjusted Account Balances Debit Credit

Merchandise inventory $($ending$)$ $ $34,500$

Other $($non$-$inventory$)$ assets $138,000$

Total liabilities $ $39,848$

K$.$ Valley, Capital $115,114$

K$.$ Valley, Withdrawals $8,000$

Sales $235,980$

Sales discounts $3,610$

Sales returns and allowances $15,575$

Cost of goods sold $91,673$

Sales salaries expense $32,329$

Rent expense$$Selling space $11,091$

Store supplies expense $2,832$

Advertising expense $20,058$

Office salaries expense $29,498$

Rent expense$$Office space $2,832$

Office supplies expense $944$

Totals $ $390,942$ $ $390,942$

Beginning merchandise inventory was $$27,842.$ Supplementary records of merchandising activities for the year ended August $31$ reveal the following itemized costs.

Invoice cost of merchandise purchases $ $101,430$

Purchases discounts received $2,130$

Purchases returns and allowances $4,869$

Costs of transportation$-$in $3,900$

Required:

Prepare closing entries as of August $31($the perpetual inventory system is used$).$

Answer & Explanation Solved by verified expert

See Answer