EXERCISE 5: ACCOUNTING FOR MERCHANDISING BUSINESS Cash Accounts Receivable Merchandise Inventory, May 1, 2007 230 APPENDIX 1 PR 4-13 Periodic inventory Chapter 4 Accounting: A Malaysian Perspective accounts, multiple-step income statement, closing entries On April 30, 2008, the balances of the accounts appearing in the ledger of Headwinds Sda Bhd are as follows: RM 18,300 72,125 Sales Discounts Purchases RM 9,375 536,500 87,725 Purchases Returns and Allowances 6,000 Office Supplies 3,025 Purchases Discounts 4,500 Prepaid Insurance 4,500 Transportation In 10,900 35,000 Sales Salaries Expense 156,250 Land 2. Net income, Store Equipment 170,775 Advertising Expense 55,000 Accumulated Depreciation- Delivery Expense 9,000 RM181,300 Store Equipment 55,900 Depreciation Expense- Office Equipment 78,500 Store Equipment 5,900 Accumulated Depreciation- Miscellaneous Selling Expense 10,700 Office Equipment 16,250 Office Salaries Expense 100,000 Accounts Payable 27,825 Rent Expense 31,250 Salaries Payable Unearned Rent Notes Payable 2,950 Insurance Expense 3,000 8,300 Office Supplies Expense 2,300 12,500 Depreciation Expense- Kaseh Kurtz, Capital 190,050 Office Equipment 1,500 Kaseh Kurtz, Drawing 18,750 Miscellaneous Administrative Expense 5,850 Sales 1,106,450 Rent Revenue Sales Returns and Allowances 10,000 Interest Expense 6,250 750 Instructions 1. Prepare a multiple-step income statement for Headwinds Sdn Bhd for the year ended April 30, 2008. The merchandise inventory as of April 30, 2008, was RM94,100. 2. Prepare the closing entries for Headwinds Sdn Bhd as of April 30, 2008.