On July 31 2012 the balances of the accounts appearing
On July 31, 2012, the balances of the accounts appearing in the ledger of Sagebrush Company are as follows:

1. Does Sagebrush Company use a periodic or perpetual inventory system? Explain.
2. Prepare a multiple-step income statement for Sagebrush Company for the year ended July 31, 2012. The merchandise inventory as of July 31, 2012, was $80,000.
3. Prepare the closing entries for Sagebrush Company as of July 31, 2012.
4. What would be the net income if the perpetual inventory system had beenused?
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