On December 31, 2018, the balances of the accounts appearing in the ledger of Wyman Company are as follows:

Instructions 1. Does Wyman Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Wyman Company for the year ended December 31, 2018. The inventory as of December 31, 2018, was $305,000. The estimated cost of customer returns inventory for December 31, 2018, is estimated to increase to $40,000. 3. Prepare the closing entries for Wyman Company as of December 31, 2018. 4. What would be the net income if the perpetual inventory system had been used?

Cash Accounts Receivable Inventory, January 1, 2018 Estimated Returns Inventory S 13,500 Dividends 72,000 Sales 25,000 3,280,000 2,650,000 93,000 37,000 48,000 300,000 45,000 9,000 257,000 Purchases Purchases Returns and Allowances January 1, 2018 Office Supplies Prepaid Insurance Land Store Equipment Accumulated Depreciation 35,000 Purchases Discounts ,000 Freight In 4,500 Sales Salaries Expense 50,000 Advertising Expense 0,000 Delivery Expense Depreciation Expense Store Equipment Office Equipment Accumulated Depreciation 55,900 78,500 Store Equipment Miscellaneous Selling Expense Office Salaries Expense 6,000 12,000 175,000 28,000 3,000 2,000 Office Equipment Accounts Payable Salaries Payable Customer Refunds Payable Unearned Rent Notes Payable Common Stock Retained Earnings 6,000 Rent Expense 7,800 nsurance Expense 3,000 Office Supplies Expense 50,000 Depreciation Expense 8,300 Office Equipment 50,000 Miscellaneous Administrative Expense 1,500 3,500 7,000 2,000 150,000 et Revenue 365,600 Interest Expense