Problems: Set A P5-6A Wolcott Warehouse Store has an August 31 fiscal year end and uses a perpetual inventory system. An alphabetical list of its account balances at August 31, 2014, follows. All accounts have normal balances. Accounts payable Accounts receivable Accumulated depreciation- equipment Cash $ 30,000 20,000 Interest revenue Merchandise inventory Notes payable Notes receivable Rent expense Sales 24 960 57,440 36,000 32,000 26,720 12,525 16,000 Cost of goods sold Depreciation expense Equipment Freight out Insurance expense Interest expense 569,680 703,360 6,680 Sales discounts 3,700 Sales returns and allowances Supplies expense Unearned revenue 66,800 14,440 5,840 4,720 6,040 2,895 V. Wolcott, capital V. Wolcott, drawings 72,680 2,160 Interest receivable 60,640 240 Additional information: 1. All adjustments have been recorded and posted except for the inventory adjustment. According to the inventory count, the company has $55,000 of merchandise on hand. 2. Last year Wolcott Warehouse Store had a gross profit margin of 20% and a profit margin of 10%. Instructions (a) Prepare any additional required adjusting entries. (b) Prepare a single-step income statement. (c) Prepare a multiple-step income statement. (d) Calculate gross profit margin and profit margin. Compare with last year's margins and comment on the results. (e) Prpare the closing entries. Post to the Income Summary account. Before closing the Income Sum- mary account, check that the balance is equal to profit. Compare the two income statements and comment on the usefulness of each one. TAKING IT FURTHER