Use the following information for the Quick Study below.

[The following information applies to the questions displayed below.]

Nix'It Company's ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix'It uses the perpetual inventory system).

Merchandise inventory $ 45,300 Sales returns and allowances $ 5,000

T. Nix, Capital 130,300 Cost of goods sold 109,500

T. Nix, Withdrawals 7,000 Depreciation expense 11,800

Sales 162,100 Salaries expense 40,000

Sales discounts 4,400 Miscellaneous expenses 5,000

A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $43,400.

Question

Carissa Parks

Business

20 May, 19:30

Use the following information for the Quick Study below.

[The following information applies to the questions displayed below.]

Nix'It Company's ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix'It uses the perpetual inventory system).

Merchandise inventory $ 45,300 Sales returns and allowances $ 5,000

T. Nix, Capital 130,300 Cost of goods sold 109,500

T. Nix, Withdrawals 7,000 Depreciation expense 11,800

Sales 162,100 Salaries expense 40,000

Sales discounts 4,400 Miscellaneous expenses 5,000

A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $43,400.

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Answers (1)

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Olson · Answer 1

Nix'It Company's Journal entries

July 31

Dr Sales 162,100

Cr Incomes summary 162,100

(To close sales revenue to income summary recorded)

July 31

Dr Income summary 175,600

Cr Sales returns and allowances $ 5,000

Cr Cost of goods sold 109,600

Cr Depreciation expense 11,800

Cr Salaries expense 40,000

Cr Sales discounts 4,400

Cr Miscellaneous expenses 5,000

(To close expenses account recored)

Explanation:

Cost of goods sold + (Merchandise inventory still available-Merchandise inventory)

109,500 + (45,400-45,300)

=109,500+100

=109,600