The following list of accounts is taken from the December 31, 2020, unadjusted trial balance of Perdu Sales, a business that is owned by Eldon Perdu.

	Debit			Credit
Cash	$	8,200
Merchandise inventory		10,000
Prepaid selling expense		8,200
Store equipment		42,000
Accumulated depreciation, store equipment				$	10,000
Accounts payable					15,040
Salaries payable					0
Eldon Perdu, capital					26,160
Eldon Perdu, withdrawals		3,800
Sales					878,000
Sales returns and allowances		35,000
Sales discounts		8,200
Cost of goods sold		441,000
Sales salaries expense		96,000
Utilities expense, store		12,800
Other selling expenses		72,000
Other administrative expenses		192,000

Additional information: Accrued sales salaries amount to $3,400. Prepaid selling expenses of $5,300 have expired. Depreciation for the period is $2,700. Required: Assuming a perpetual inventory system, complete the following: a. Journalize the adjusting journal entries.

b. Prepare a classified multiple-step income statement for the year ended December 31, 2020.

Analysis Component: Assume that for the year ended December 31, 2019, net sales were $620,000; operating expenses were $354,000; and there was a loss of $15,000. Calculate the companys gross profit ratios for 2019 and 2020. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)