The adjusted trial balance of Propp Products at November 30, 2014, is shown on below. Propp Products uses the perpetual inventory system.
Required
1. Journalize Propp Products' closing entries.
2. Compute the gross margin percentage and the rate of inventory turnover for 2014. Inventory on hand one year ago was $10,700. For 2013, Propp Products' gross margin was 32 percent, and inventory turnover was 4.9 times during the year. Does the two-year trend in these ratios suggest improvement or deterioration in profitability?

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Adjusted Trial Balance Account Title Debit Credit $ 4,000 Cash Accounts receivable 24,250 13,700 Inventory 700 Supplies Furniture 20,000 $ 12,000 Accumulated amortization-furniture Accounts payable 7,250 Salary payable 1,100 Unearned sales revenue 3,600 Note payable, long-term 22,500 A. Propp, capital 20,650 A. Propp, withdrawals 18,000 112,500 Sales revenue Sales returns 3,000 Cost of goods sold 67,500 Selling expenses 16,850 General expenses 10,500 Interest expense 1,100 Total $179,600 $179,600