C. MCCARTHY MERCHANDISING CORPORATION Adjusted Trial Balance August 1, 20x1 Credit Debit Balances Balances Account Names Cash Accounts receivable Prepaid rent Inventory Purchases Purchase discounts Purchase returns & allowances Salaries payable Common stock Retained earnings Sales revenue Sales returns $2,000 1,500 300 1,400 4,200 S 300 800 200 1,600 2,500 5,800 400 800 600 $11,200 Totals $11,200 Required: 1. Open the T-accounts listed in the trial balance and the income summary account and enter the beginning balances. Also enter the ending balance for inventory 2. Make all the closing entries. As you make the closing entries, indicate the values of net revenue, net purchases, goods available for sale, and gross margin. Calculate the ending balance of each account 3. Prepare the income statement (highlighting gross margin) and the balance sheet. 4. What is the gross margin percentage? The solution to this problem is shown on the following pages. R is to create all the T-accounts and balances. The ending debit balance for inventory is given in the s900. Requirement 2 includes 10 closing entries. The entries follows the ledger page. equirement 1 enter their beginning debit or credit problem to be explanation of these Chapter 5 Section B