Data for Stojanovic Distributing Company are presented in P5.5B. A physical inventory count shows the company has $5,570 of inventory on hand at September 30, 2024.

Instructions
a. Record the transactions assuming Stojanovic Distributing Company uses a periodic inventory system and the earnings approach.
b. Set up general ledger accounts for merchandise inventory and all of the temporary accounts used in the merchandising transactions. Enter beginning balances, post the transactions, and update the account balances.
c. Prepare a partial multiple-step income statement, up to gross profit, for the month of September 2024.

Taking It Further

Will Stojanovic Distributing Company’s gross profit be higher, lower, or the same amount, if it uses a periodic inventory system instead of a perpetual inventory system? Explain.