JayCO Inc. in the appliance part business. The company buys appliance repair parts from the major manufacturers of appliances. At the beginning of the fiscal year the inventory had a debit balance $2,750,000. During the year JayCo Inc. purchased $10,000,000 worth of parts. The sales for the fiscal year amounted to $18,500,000. At the end of the fiscal year the company took a physical count of its inventory which came to $1,800,000. The sales returns and allowances for the year amounted to $150,000.

Required:
A. From the information above prepare JayCO Inc Income Statement down to the “Gross Profit” line. Use the form below.

B. Make the required adjusting and closing entries to bring the accounting system up to date