On July 31, 2008, the balances of the accounts appearing in the ledger of Odell Company are as follows:

Instructions
1. Does Odell Company use the periodic or perpetual inventory system? Explain.
2. Prepare a multiple-step income statement for Odell Company for the year ended July 31, 2008. The merchandise inventory as of July 31, 2008, was $376,400.
3. Prepare the closing entries for Odell Company as of July 31,2008.

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73,200 Sales Discounts 288,500 Purchases Cash Accounts Receivable Merchandise Inventory, Aug. 1, 2007 350,900 Purchases Returns and Allowances 24,000 Office Supplies $ 37,500 2,146,000 Purchases Discounts Transportation In 18,000 12,100 18,000 Prepaid Insurance 43,600 625,000 220,000 36,000 140,000 ls Salaries Expense 683,100 Advertising Expense Store Equipment Accumulated Depreciation- Delivery Expense Depreciation Expense -Store Store Equipment Office Equipment Accumulated Depreciation- 223,600 314,000 Equipment Miscellaneous Selling Expense Office Salaries Expense Rent Expense 23,600 42,800 400,000 125,000 12,000 9,200 Office Equipment Accounts Payable Salaries Payable Unearned Rent Notes Payable Marcus Odell, Capital Marcus Odell Drawing Sales Sales Returns and Allowances 65,000 11,800 Insurance Expense 33,200 Office Supplies Expense 50,000 Depreciation Expense- 760,200 Office Equipment 6,000 75,000 Miscellaneous Administrative Expense 23,400 25,000 3,000 4,425,800 40,000 Rent Revenue Interest Expense