Periodic inventory accounts, multiple-step income statement, closing entries On December 31, 2016, the balances of the accounts appearing in the ledger of Wyman Company are as follows:

Cash $ 13,500 Purchases $2,650,000 Accounts Receivable 72,000 Purchases Returns and Allowances 93,000 Merchandise Inventory, Purchases Discounts 37,000 January 1, 2016 257,000 Freight In 48,000 Office Supplies 3,000 Sales Salaries Expense 300,000 Prepaid Insurance 4,500 Advertising Expense 45,000 Land 150,000 Delivery Expense 9,000 Store Equipment 270,000 Depreciation Expense—

Accumulated Depreciation— Store Equipment 6,000 Store Equipment 55,900 Miscellaneous Selling Expense 12,000 Office Equipment 78,500 Office Salaries Expense 175,000 Accumulated Depreciation— Rent Expense 28,000 Office Equipment 16,000 Insurance Expense 3,000 Accounts Payable 27,800 Office Supplies Expense 2,000 Salaries Payable 3,000 Depreciation Expense—

Unearned Rent 8,300 Office Equipment 1,500 Notes Payable 50,000 Miscellaneous Administrative Expense 3,500 Common Stock 150,000 Rent Revenue 7,000 Retained Earnings 430,500 Interest Expense 2,000 Dividends 25,000 Sales 3,280,000 Instructions 1. Does Wyman Company use a periodic or perpetual inventory system? Explain.

2. Prepare a multiple-step income statement for Wyman Company for the year ended December 31, 2016. The merchandise inventory as of December 31, 2016, was $305,000.

3. Prepare the closing entries for Wyman Company as of December 31, 2016.

4. What would be the net income if the perpetual inventory system had been used?