Chapter 5 Accounting for Merchandising Businesses Appendix PR 5-10B Periodic inventory accounts, multiple-step income statement, closing entries Net income, On June 30, 2018, the balances of the accounts appearing in the ledger of Simkins Company $1,208,000 are as follows: Cash $ 125,000 Dividends $ 275,000 Accounts Receivable 340,000 Sales 6,590,000 EXCEL TEMPLATE Inventory, July 1, 2017 415,000 Purchases 4,100,000 Estimated Returns Inventory, Purchases Returns and Allowances 32,000 July 1, 2017 25,000 Purchases Discounts 13,000 Office Supplies 9,000 Freight in 45,000 Prepaid Insurance 18,000 Sales Salaries Expense 580,000 Land 300,000 Advertising Expense 315,000 Store Equipment 550,000 Delivery Expense 18,000 Accumulated Depreciation Depreciation Expense- Store Equipment 190,000 Store Equipment 12,000 Office Equipment 250,000 Miscellaneous Selling Expense 28,000 Accumulated Depreciation- Office Salaries Expense 375.000 Office Equipment 110,000 Rent Expense 43.000 Accounts Payable 85,000 Insurance Expense 17,000 Customer Refunds Payable 30,000 Office Supplies Expense 5,000 Salaries Payable 9,000 Depreciation Expense- Unearned Rent 6,000 Office Equipment 4,000 Notes Payable 50,000 Miscellaneous Administrative Expense 16.000 Common Stock 300,000 Rent Revenue 32.500 Retained Earnings 520,000 Interest Expense 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 lune so 2018. The inventory as of June 30, 2018, was $508,000. The estimated cost of customer returns inventory for June 30, 2018 is estimated to increase to $33,000. 3. Prepare the closing entries for Simkins Company as of June 30, 2018. 4. What would be the net income if the perpetual inventory system had been used