On December 31, 2015, the balances of the accounts appearing in the ledger of Andover Company are as follows:

Instructions
1. Does Andover Company use a periodic or perpetual inventory system? Explain.
2. Prepare a multiple-step income statement for Andover Company for the year ended December 31, 2015. The inventory as at December 31, 2015, was $188,200.
3. Prepare the closing entries for Andover Company as at December 31, 2015.

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S 18.750 1,073,000 12,000 9,000 21,800 312,500 110,000 18,000 S 36,600 Sales Discounts Accounts Receivable Inventory, January 1, 2015 Office Supplies Prepaid Insurance Store Equipment Accumulated Depreciation- 144,250 175,450 Purchases Purchases Returns and Allowances 6,050 Purchases Discounts 9,000 Freight In 9 Sales Salaries Expense Advertising Expense 341,550 Store Equipment Office Equipment Accumulated Depreciation- 11,800 Delivery Expense 157,000 Depreciation Expense- Office Equipment Land Accounts Payable Salaries Payable Unearned Rent Notes Payable Vanessa Andover, Capital Vanessa Andover, Withdrawals Sales Sales Retums and Allowances 32,500 70,000 55,650 5,900 16,600 25,000 380,100 37,500 Store Equipment Miscellaneous Selling Expense Office Salaries Expense Rent Expense Insurance Expense Office Supplies Expense Depreciation Expense- 11,800 21,400 200,000 62,500 6,000 ,600 3,000 11.700 12,500 1,500 Miscellaneous Administrative Expense 2,212, 900 Rent Revenue 20,000 Interest Expense