The accountant for the Miller Hardware Store, after completing all adjustments except for the merchandise inventory, makes the following entry to close the beginning inventory, to set up the ending inventory, to close all nominal accounts, and to report the net result of operations in the retained earnings account.

(a) Would you regard this procedure as being acceptable?

(b) What alternate procedure could you have followed to close the nominal accounts?

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Inventory (Dec. 31, 2002)........... 22,500 Sales Purchase Discounts......... Inventory (Jan. 1, 2002)............ Purchases. General and Administrative Selling Expenses. Expenses. Interest Expense Retained Earnings. 250,000 2,500 25,000 175,000 25,000 18,750 1,875 29.375