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 Income Statement I Debit Credit 19,800 Description Sales Revenue Salary Expense Cost of Goods Rent Expense Income summary 500 . Gross Margin Percentage - Gross Margin / Net sales Revenne X100% Template for Problem 5B-1; Requirements 1 and 2 Cash Prepaid Rent 7,900 Accounts Receivable 7100 1,100 Inventory bat 9,800 Purchases 5,200 11,900 2,400 Purchase Discounts 1,900 (a) 1,900 Pur Returns & Allowances 2,000 Salaries Payable 800 Common Stock 1,700 2,000 10 Sales Revenue Retained Earnings 7700 800 14,800 1.800 18,000 18,000 Sales Returns 400 400 18500 COGS Rent Expense Salary Expense 900 500 900 500 Income Summary