The adjusted trial balance of Propp Products at November 30, 2017, is shown below. Propp Products uses the perpetual inventory system.

Required
1. Journalize Propp Products' closing entries.
2. Compute the gross margin percentage and the rate of inventory turnover for 2017. Inventory on hand one year ago was $10,700. For 2016, Propp Products' gross margin was 32 percent and inventory turnover was 4.9 times during the year. Does the two-year trend in these ratios suggest improvement or deterioration in profitability?

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PROPP PRODUCTS Adjusted Trial Balance November 30, 2017 Credit $ 4,000 24,250 13,700 Accounts receivable Inventory Supplies Furniture Accumulated amortization-furniture Accounts Salary payable Unearned sales revenue Note payable, long-term A. Propp, capital A. Propp, withdrawals Sales revenue Sales returns Cost of goods sold Selling expenses General expenses Interest expense Total 20,000 $12,000 7,250 1,100 3,600 payable 20,650 18,000 112,500 3,000 67,500 16,850 10,500 1,100 $179,600 $179,600