Question

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.

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)

Step-by-step explanation:

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

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

=109,500+100

=109,600