On April 30, 2012, the balances of the accounts appearing in the ledger of Heritage Company are as follows:

Instructions

1. Does Heritage Company use a periodic or perpetual inventory system? Explain.

2. Prepare a multiple-step income statement for Heritage Company for the year ended April 30, 2012. The merchandise inventory as of April 30, 2012, was $315,000.

3. Prepare the closing entries for Heritage Company as of April 30, 2012.

4. What would he the net income if the perpetual inventory system had beenused?

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5 G0,000 $ 35,000 1,770.000 Sales Discounts Cash Accounts Receivable 150.000 Purchases Merchandise inventory, May 1,2011 Office Supplies Purchases Returns and Alowances 290.000 12.000 7.000 Purchases Discounts 8.000 Feight in Sales Salaries Expense 25.000 Prepaid trsurance 18.000 Land 70,000 450.000 400.000 Advertising Expense Store Equipment Accumulated Depreciation- Store Equipment Office Equipment Accumulated Deprecation- 200,000 Delivery Expense 18.000 190,000 Depreciatian txpense- 250.000 Stere Equipment 12.000 Miscellaneous Seiling Expense 78.000 Office Equipment Accaunts Payable Salaries Payable Unearned Rent 110,000 office Salaries Expense 200.000 85,000 Rent Expense 45,000 9.000 Insurance Expense 6,000 Office Supples Expense 6.000 5.000 Notes Payable 5000 Depreciation Expense- 40.000 Office Equipment Miscellaneous Administrative Expense Capital Stock 3.000 Retained Earnings 485.000 13,000 Dividends 100,000 Rent Revenue 27,000 Sales 3,175,000 Interest Expense 2.000 Sales Returns and Allowances 40,000