United Rug Company is a small rug retailer owned and operated by Pat Kirwan. After the accounts have been

United Rug Company is a small rug retailer owned and operated by Pat Kirwan. After the accounts have been adjusted on December 31, the following selected account balances were taken from the ledger:


Advertising Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,000
Depreciation Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000
Freight In . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000
Merchandise Inventory, December 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375,000
Merchandise Inventory, December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460,000
Miscellaneous Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,760,000
Purchases Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000
Purchases Returns and Allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000
Pat Kirwan, Drawing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,000
Salaries Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375,000
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,300,000
Sales Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Sales Returns and Allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000



Journalize the closing entries on December 31.


Answer:

Closing Entries
Dec. 31 Merchandise Inventory 460,000
Sales 2,300,000
Purchases Discounts 35,000
Purchases Returns and Allowances 45,000
Income Summary 2,840,000
31 Income Summary 2,665,000
Merchandise Inventory 375,000
Sales Discounts 30,000
Sales Returns and Allowances 50,000
Purchases 1,760,000
Freight In 17,000
Salaries Expense 375,000
Advertising Expense 36,000
Depreciation Expense 13,000
Miscellaneous Expense 9,000
31 Income Summary 175,000
Pat Kirwan, Capital 175,000
31 Pat Kirwan, Capital 65,000
Pat Kirwan, Drawing 65,000