1. KelCO is a distributor of rum. The company buys the rum from different distillers throughout the United States and stores it in stainless steel tanks until it is bottled. The company then bottles and labels the rum under the retailer's brand name. The company sells the rum to big-box discount retailers. It ships the bottled rum directly to the customer on the same day the rum is bottled with FOB terms shipping point. It does not have any finished goods inventory just the inventory of rum in the stainless steel tanks. The business is a Limited Liability Company (LLC) and uses the periodic inventory system to account for its inventory. During the current fiscal year, the company sales were $35,000,000 and had sales returns and allowances of $22,000. The company purchased from various distillers $28,500,000 worth of rum and had purchase returns of $15,000. The beginning inventory amounted to $4,500,000. An inventory count was made at the end of the fiscal year and the inventory was valued at $3,200,000. Required: A. From the information above produce a classified income statement using the periodic inventory system down to the Gross Profit line.

B. Assume that all of the transactions above have been journalized correctly, Make all of the required 0adjusting and closing journal entries to bring the accounting system up to date.