Valley Company’s adjusted trial balance on August 31, 2015, its fiscal year-end, follows.
| Debit | Credit | |||
|---|---|---|---|---|
| Merchandise inventory | $ | 40,500 | ||
| Other (noninventory) assets | 45,590 | |||
| Total liabilities | $ | 25,800 | ||
| Common stock | 17,040 | |||
| Retained earnings | 4,260 | |||
| Dividends | 8,400 | |||
| Sales | 226,700 | |||
| Sales discounts | 2,260 | |||
| Sales returns and allowances | 13,500 | |||
| Cost of goods sold | 74,600 | |||
| Sales salaries expense | 32,400 | |||
| Rent expense-Selling space | 8,400 | |||
| Store supplies expense | 1,800 | |||
| Advertising expense | 13,500 | |||
| Office salaries expense | 29,200 | |||
| Totals | $ | 273,800 | $ | 273,800 |
On August 31, 2014, merchandise inventory was $25,600. Supplementary records of merchandising activities for the year ended August 31, 2015, reveal the following itemized costs.
| Invoice cost of merchandise purchases | $ | 92,500 |
|---|---|---|
| Purchase discounts received | 2,700 | |
| Purchase returns and allowances | 4,900 | |
| Costs of transportation-in | 4,600 |
Required: 1. Prepare closing entries as of August 31, 2015 (the perpetual inventory system is used).
Close the income statement accounts with credit balances.
Close the income statement accounts with debit balances.
Close Income summary.
Close the Dividends account.