The Klara Kamberaj Department Store is located in midtown Toronto. Over the past year, net income has been declining because of competition from suburban shopping centres. At the end of the companys fiscal year on December 31, 20X0, the following accounts appeared in alphabetical order in its adjusted trial balance:

Accounts Payable .................................................. $ 1,285,000

Accounts Receivable ............................................ 1,110,000

Accumulated Amort.-Building .............................. 1,250,000

Amortization Expense-Building .......................... 1,100,000

Building ................................................................... 11,400,000

Retained Earnings ................................................. 11,900,000

Cash ......................................................................... 132,000

Delivery Equipment ............................................... 1,271,880

Delivery Expense ................................................... 65,000

Freight-In ................................................................. 45,000

Insurance Expense ............................................... 70,000

Land ......................................................................... 1,400,000

Merchandise Inventory ......................................... 265,000

Mortgage Payable ................................................. 2,200,000

Prepaid Insurance ................................................. 136,000

Property Tax Expense .......................................... 228,000

Property Taxes payable ........................................ 328,000

Purchases ............................................................... 5,050,000

Purchase Returns & Allowances ........................ 25,000

Salaries Expense ................................................... 1,100,000

Sales ........................................................................ 7,100,000

Sales Returns & Allowances ............................... 100,000

Sales Commission Expense ................................ 100,000

Sales Commissions Payable ............................... 60,000

Utilities Expense .................................................... 160,000

Dividends Income .................................................. 250,000

Loss from Discontinued Operation ..................... 120,000

Other comprehensive Income ............................. 80,000

Additional information:

1. Merchandise inventory as at December 31, 20X0 is $330,000
2. The Klara Kamberaj Department Store uses a periodic inventory system.
3. The Klara Kamberaj Department Store does not segregate its operating expenses into selling and administrative categories.
4. All revenues, gains, expenses and losses are before tax.
5. The Income Tax Rate is 40.0%.

Required:

1. Prepare a multi-step income statement for the year ended December 31, 20X0.

2. Prepare the required compound closing entries.