Problems for Section 5B 5B-1. (This problem is similar to the summary problem provided above.) The Adjusted Trial Balance for TILFORD Merchandising Corporation for the month ending May 1 (prior to the COGS calculation) is presented below. The inventory value shown is from the beginning of the month. Inventory on hand at the end of May was $700. Required: 1. Open the trial balance T-accounts and the income summary account and enter the beginning balances. Enter the ending balance for inventory. 2. Make closing entries. Indicate the values of net revenue, net purchases, goods available for sale, and gross margin. Calculate the ending balance in each account. 3. Prepare the income statement (highlighting gross margin). What is the gross margin percentage? TILFORD MERCHANDISING CORPORATION Adjusted Trial Balance May 1, 20x1 Debit Credit Account Names Balances Balances Cash $7.900 Accounts receivable 7.100 Prepaid rent 1,100 Inventory 9.800 Purchases 5,200 Purchase discounts $1,900 Purchase returns & allowances 2.400 Salaries payable 800 Common stock 1,700 Retained earnings 7,700 Sales revenue 19,800 Sales returns 1,800 Cost of goods sold Salary expense 900 Rent expense 500 Totals $34,300 $34,300 Template for Problem 5B-1; Requirements 1 and 2 Prepaid Rent Cash 7,900 Accounts Receivable 7106 1,100 Inventory bal 9,800 Purchases 5,200 1,900 2,400 Purchase Discounts 1,900 (a) 1,900 Pur Returns & Allowances Salaries Payable 800 Common Stock 1.700 2,000 2,000 Sales Revenue Sales Returns 19,800 Retained Earnings 7,700 800 18500 1,800 400 400 78,000 18,000 COGS Salary Expense 900 Rent Expense 500 1500 1900 Income Summary