Presented below is information related to Taylor Co. for the month of January 2014.

Ending inventory per Insurance expense $ 12,000 perpetual records $ 21,600 Rent expense 20,000 Ending inventory actually Salaries and wages expense 59,000 on hand 21,000 Sales discounts 8,000 Cost of goods sold 208,000 Sales returns and allowances 13,000 Freight-out 7,000 Sales revenue 378,000 Instructions

(a) Prepare the necessary adjusting entry for inventory.

(b) Prepare the necessary closing entries.