Presented below is information related to Garland Co. for the month of January 2020.

Ending inventory per perpetual records ................................................   $ 21,600
Insurance expense ...................................................................................    $ 12,000
Rent expense ............................................................................................       20,000
Ending inventory actually on hand ........................................................       21,000

Salaries and wages expense ...................................................................      55,000
Sales discounts .........................................................................................      10,000
Cost of goods sold ...................................................................................    218,000

Sales returns and allowances ................................................................      13,000

Freight-out ...............................................................................................         7,000

Sales revenue ..........................................................................................    380,000

Instructions

a. Prepare the necessary adjusting entry for inventory.

b. Prepare the necessary closing entries.