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: Cash $125,000 Dividends $275,000 Accounts Receivable 340,000 Sales 6,590,000 Inventory, July 1, 20Y8 415,000 Purchases 4,100,000 Estimated Returns Inventory, July 1, 20Y8 25,000 Purchases Returns and Allowances 32,000 Office Supplies 9,000 Purchases Discounts 13,000 Prepaid Insurance 18,000 Freight In 45,000 Land 300,000 Sales Salaries Expense 580,000 Store Equipment 550,000 Advertising Expense 315,000 Accumulated Depreciation-Store Equipment 190,000 Delivery Expense 18,000 Office Equipment 250,000 Depreciation Expense-Store Equipment 12,000 Accumulated Depreciation-Office Equipment 110,000 Miscellaneous Selling Expense 28,000 Accounts Payable 85,000 Office Salaries Expense 375,000 Customer Refunds Payable 30,000 Rent Expense 43,000 Salaries Payable 9,000 Insurance Expense 17,000 Unearned Rent 6,000 Office Supplies Expense 5,000 Notes Payable 50,000 Depreciation Expense-Office Equipment 4.00 Common Stock 300,000 Miscellaneous Administrative Expense 16,000 Retained Earnings 520,000 Rent Revenue 32,500 Interest Expense 2,500 Required: 1. Does Simkins Company use a periodic inventory system or perpetual inventory system? Periodic inventory system Which account listed would be used under one inventory system but not used under both inventory systems? Purchases2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2019. The inventory as of June 30, 2019, was $508,000. The estimated cost of customer returns inventory for June 30, 2019 is estimated to increase to $33,000. Simkins Company Income Statement For the Year Ended June 30, 20Y9 Sales $ $ Cost of goods sold: Inventory, July 1, 20Y8 $ $ Cost of merchandise purchased: Purchases $ $ Purchases returns and allowances Purchases discounts V Freight in Total cost of merchandise purchased Inventory available for sale Inventory, June 30, 2019 Cost of goods sold before estimated returns Increase in estimated returns inventory V Cost of goods sold Gross profit $ $ Operating Expenses: Selling expenses: Sales salaries expense $ $ Advertising expense Delivery expense Depreciation expense-store equipmentMiscellaneous selling expense Total selling expenses $ $ Administrative expenses: Office salaries expense $ $ Rent expense Insurance expense Office supplies expense Depreciation expense-office equipment Miscellaneous administrative expense Total administrative expenses Total operating expenses Operating income Other revenue and expense: Rent revenue Interest expense Net income V $ $ 3. Prepare the closing entries for Simkins Company as of June 30, 2019 in the order as presented in the chapter. If an amount box does not require an entry, leave it blank. Date Account Debit Credit June 30 Inventory Estimated Returns Inventory Sales Purchases Returns and Allowances Purchases DiscountsRent Revenue Inventory Purchases Freight In Sales Salaries Expense Advertising Expense Delivery Expense Depreciation Expense-Store Equipment Miscellaneous Selling Expense V Office Salaries Expense Rent Expense V Insurance Expense Office Supplies Expense Depreciation Expense-Office Equipment Miscellaneous Administrative Expense Interest Expense Retained Earnings June 30 Retained Earnings Dividends 4. What would be the net income if the perpetual inventory system had been used? $