The following is an alphabetical list of Tse?s Tater Tots? adjusted account balances at the end of the company?s fiscal year on December 31, 2021:

Additional information:

1. Tse?s Tater Tots uses a periodic inventory system with the earnings approach.

2. A physical inventory count determined that merchandise inventory on December 31, 2021, was $34,600.

3. Of the mortgage payable, $17,000 is to be paid April 30, 2022.

Instructions

a. Prepare a multiple-step income statement, a statement of owner?s equity, and a classifi ed balance sheet.

b. Prepare the closing journal entries.

c. Post the closing entries to the inventory and capital accounts. Check that the balances in these accounts are the same as the amounts on the balance sheet.

If you had not been told that Tse?s Tater Tots uses a periodic inventory system, how could you have determined that? What information is available in a periodic inventory system that is not available in a perpetual inventory system?

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Accounts payable $ 86,300 $ 1,050 Interest revenue Accounts receivable 44,200 Land 75,000 Accumulated depreciation-building Accumulated depreciation-equipment Building Merchandise inventory Mortgage payable Property tax expense Purchases 51,800 40,500 42,900 190,000 155,000 4,800 441,600 Cash 17,000 Purchase discounts Depreciation expense Equipment Freight in Freight out H. Tse, capital H. Tse, drawings 23,400 8,830 110,000 Purchase returns and allowances 20,070 Salaries expense Salaries payable Sales 5,600 127,500 3,500 7,500 143,600 642,800 14,450 Sales discounts 12,700 9,600 11,345 Sales returns and allowances Insurance expense Interest expense Interest payable 11,900 8,300 Unearned revenue 945 Utilities expense 18,000