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Novak Company had the following account balances at year$-$end: Cost of Goods Sold $\backslash (\backslash$$ $60,870\backslash ),$ Inventory $\backslash (\backslash$$ $18,070\backslash ),$ Utilities Expense $\backslash (\backslash$$ $32,660\backslash ),$ Sales Revenue $\backslash (\backslash$$ $123,390\backslash ),$ Sales Discounts $\backslash (\backslash$$ $1,030\backslash ),$ and Sales Returns and Allowances $\backslash (\backslash$$ $1,930\backslash ).$ A physical count of inventory determines that merchandise inventory on hand is $\backslash (\backslash$$ $12,840\backslash ).$ They use the perpetual inventory system.

$($a$).$

$($b$)$

Your answer is partially correct.

Prepare closing entries. $($List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts.$)$

Account Titles and Explanation

Sales Revenue

Income Summary

$($To close accounts with credit balances$)$

Income Summary

Sales Discounts

Sales Returns and Allowances

Cost of Goods Sold

Utilities Expense

$($To close accounts with debit balances$)$

Income Summary

Owner's Capital

Debit

$123,390$

Credit

$123,390$

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Novak Company had the following account balances at year$-$end: Cost of Goods Sold $\backslash (\backslash$$ $60,870\backslash ),$ Inventory $\backslash (\backslash$$ $18,070\backslash ),$ Utilities Expense $\backslash (\backslash$$ $32,660\backslash ),$ Sales Revenue $\backslash (\backslash$$ $123,390\backslash ),$ Sales Discounts $\backslash (\backslash$$ $1,030\backslash ),$ and Sales Returns and Allowances $\backslash (\backslash$$ $1,930\backslash ).$ A physical count of inventory determines that merchandise inventory on hand is $\backslash (\backslash$$ $12,840\backslash ).$ They use the perpetual inventory system.

$($a$).$

$($b$)$

Your answer is partially correct.

Prepare closing entries. $($List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts.$)$

Account Titles and Explanation

Sales Revenue

Income Summary

$($To close accounts with credit balances$)$

Income Summary

Sales Discounts

Sales Returns and Allowances

Cost of Goods Sold

Utilities Expense

$($To close accounts with debit balances$)$

Income Summary

Owner's Capital

Debit

$123,390$

Credit

$123,390$

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