On December 31, 2016, the balances of the accounts appearing in the ledger of Wyman Company are as follows:

Instructions
1. Does Wyman Company use a periodic or perpetual inventory system? Explain.
2. Prepare a multiple-step income statement for Wyman Company for the year ended December 31, 2016. The merchandise inventory as of December 31, 2016, was $305,000.
3. Prepare the closing entries for Wyman Company as of December 31, 2016.
4. What would be the net income if the perpetual inventory system had been used?

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Cash Accounts Receivable Merchandise Inventory 13,500 Purchases 72,000 Purchases Returns and Allowances $2,650,000 93,000 37,000 48,000 300,000 45,000 9,000 Purchases Discounts 257,000 Freight In January 1, 2016 Office Supplies Prepaid Insurance Land Store Equipment Accumulated Depreciation- 3,000 4,500 Sales Salaries Expense Advertising Expense 150,000 Delivery Expense 270,000 Depreciation Expense- Store Equipment Miscellaneous Selling Expense Office Salaries Expense Rent Expense Insurance Expense Office Supplies Expense Depreciation Expense- 6,000 12,000 175,000 28,000 3,000 2,000 Store Equipment Office Equipment Accumulated Depreciation 55,900 78,500 Office Equipment Accounts Payable Salaries Payable Unearned Rent Notes Payable Common Stock Retained Earnings Dividends Sales 16,000 27,800 3,000 8,300 Office Equipment 1,500 50,000 Miscellaneous Administrative Expense 3,500 7,000 2,000 150,000 Rent Revenue 430,500 Interest Expense 25,000 3,280,000