Use the data for Barkley Company in Problem 5-3B to complete the following requirements.
In Problem 5-3B
Barkley Company's adjusted trial balance on March 31, 2017, its fiscal year-end, follows.

On March 31, 2016, merchandise inventory was $37,500. Supplementary records of merchandising activities for the year ended March 31, 2017, reveal the following itemized costs.
Invoice cost of merchandise purchases ............................. $138,500
Purchases discounts received ......................................... 2,950
Purchases returns and allowances ................................... 6,700
Costs of transportation-in ............................................ 5,750
Required
1. Prepare closing entries as of March 31, 2017 (the perpetual inventory system is used).
2. In prior years, the company experienced a 5% returns and allowance rate on its sales, which means approximately 5% of its gross sales were eventually returned outright or caused the company to grant allowances to customers. Compute the ratio of sales returns and allowances divided by gross sales. How does this year's ratio compare to the 5% ratio in prior years?

Debit Credit Merchandise Inventory. S 56,500 S42,500 164.425 Total Iiabilities.... C. Barkley, Capital 3,000 Sales Sales discounts... Sales returns and allowances Cost of goods sold 332,650 Rent expense-Selling space.... Store supplles expense Advertising expense. Office salarles expense Rent expense-Office space Office supplies expense. 5,875 20,000 115,600 44,500 16,000 3,850 26,000 40,750 3,800 .100 $539,575 $539,575