On June 30, 2014, the balances of the accounts appearing in the ledger of Simkins Company are as follows:

Instructions
1. Does Simkins Company use a periodic or perpetual inventory system? Explain.
2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2014. The merchandise inventory as of June 30, 2014, was $508,000.
3. Prepare the closing entries for Simkins Company as of June 30, 2014.
4. What would be the net income if the perpetual inventory system had beenused?

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Cash Accounts Receivable Merchandise Inventory, July 1, 2013 Office Supplies Prepaid Insurance Land Store Equipment Accumulated Depreciation- 125,000 Sales Discounts 340,000 Purchases 415,000 66,000 4,100,000 32,000 13,000 45,000 580,000 315,000 18,000 Purchases Returns and Allowances 9,000 Purchases Discounts 18,000 Freight In 300,000 Sal Saaries Expense 550,000 Advertising Expense Delivery Expense Store Equipment Office Equipment Accumulated Depreciation- 190,000 Depreciation Expense- 250,000 Store Equipment 12,000 28,000 375,000 43,000 17,000 5,000 110,000 85,000 Miscellaneous Selling Expense Office Salaries Expense Rent Expense Accounts Payable Salaries Payable Unearned Rent Notes Payable Capital Stock Retained Earnings Dividends Sales Sales Returns and Allowances 9,000 Insurance Expense 6,000 50,000 300,000 Office Supplies Expense Depreciation Expense- Office Equipment 4,000 525,000 Miscellaneous Administrative Expense 16,000 32,500 2,500 275,000 Rent Revenue 6,748,000 Interest Expense 92,000