Appendix PR 6-9B Periodic inventory accounts, multiple-step income statement, closing entries On June 30, 2019, the balances of the accounts appearing in the ledger of Simkins Company are as follows: $4,100,000 32,000 13,000 45,000 580,000 315,000 18,000 Cash Accounts Receivable Merchandise Inventory, July 1, 2018 Estimated Returns Inventory Office Supplies Prepaid Insurance Land Store Equipment Accumulated Depreciation Store Equipment Office Equipment Accumulated Depreciation- Office Equipment Accounts Payable Customer Refunds Payable Salaries Payable Unearned Rent Notes Payable Amy Gant, Capital Amy Gant, Drawing Sales $ 125,000 Purchases 340,000 Purchases Returns and Allowances 415,000 Purchases Discounts 25,000 Freight In 9,000 Sales Salaries Expense 18,000 Advertising Expense 300,000 Delivery Expense 550,000 Depreciation Expense- Store Equipment 190,000 Miscellaneous Selling Expense 250,000 Office Salaries Expense Rent Expense 110,000 Insurance Expense 85,000 Office Supplies Expense 20,000 Depreciation Expense- 9,000 Office Equipment 6,000 Miscellaneous Administrative Expense 50,000 Rent Revenue 820,000 Interest Expense 275,000 6,590,000 12,000 28,000 375,000 43,000 17,000 5,000 4,000 16,000 32,500 2,500 Instructions 1. Does Simkins Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2019. The merchandise inventory as of June 30, 2019, was $508,000. The adjustment for estimated returns inventory for sales for the year ending December 31, 2019, was $33,000. 3. Prepare the closing entries for Simkins Company as of June 30, 2019. 4. What would the net income have been if the perpetual inventory system had been used