Valley Company\'s adjusted trial balance on August 31, 2018, its fiscal year-end

Question

Valley Company's adjusted trial balance on August 31, 2018, its fiscal year-end, follows. Debit Merchandise inventory Other (noninventory) assets Total liabilities Common stock Retained earnings Dividends 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 $41,9ee 61,728 s 25,8 16,568 28, 790 8,300 226, 188 2,248 13,8ee 72, 788 31,788 8,888 1, 780 13, 500 29,888 3,480 $288, 368 $288,368 On August 31, 2017, merchandise inventory was $25.400. Supplementary records of merchandising activities for the year ended August 31, 2018, reveal the following itemized costs. Invoice cost of merchandise purchases Purchases discounts received Purchases returns and allowances Costs of transportation-in $91,58e 2,780 4, 380 4,780 Required: 1. Prepare closing entries as of August 31, 2018 (the perpetual inventory system is used).

Explanation / Answer

1 Sales revenue 226100                 Income summary 226100 2 Income summary 176440                  Sales discount 2240                  Sales returns and allowance 13000                  cost of goods sold 72700                  Sales salaries expense 31700                  Rent expense - selling space 8800                  Stores supplies expense 1700                  Advertising expense 13500                   Office salaries expense 29000                  Rent expense - office space 3400                  Office supplies expense 400 3 Income summary 49660 (226100-176440)                   Retained earnings 49660 4 Retained earnings 8300                  Dividend 8300

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