Reference no: EM132895957

Question - The Klara Kamberaj Department Store is located in midtown Toronto. Over the past year, net income has been declining because of competition from suburban shopping centres. At the end of the company's fiscal year on December 31, 20X0, the following accounts appeared in alphabetical order in its adjusted trial balance:

Accounts Payable $1,285,000

Accounts Receivable 1,110,000

Accumulated Amort.-Building 1,250,000

Amortization Expense-Building 1,100,000

Building 11,400,000

Retained Earnings 11,900,000

Cash 132,000

Delivery Equipment 1,271,880

Delivery Expense 65,000

Freight-In 45,000

Insurance Expense 70,000

Land 1,400,000

Merchandise Inventory 265,000

Mortgage Payable 2,200,000

Prepaid Insurance 136,000

Property Tax Expense 228,000

Property Taxes payable 328,000

Purchases 5,050,000

Purchase Returns & Allowances 25,000

Salaries Expense 1,100,000

Sales 7,100,000

Sales Returns & Allowances 100,000

Sales Commission Expense 100,000

Sales Commissions Payable 60,000

Utilities Expense 160,000

Dividends Income 250,000

Loss from Discontinued Operation 120,000

Other comprehensive Income 80,000

Additional information:

-Merchandise inventory as at December 31, 20X0 is $330,000

-The Klara Kamberaj Department Store uses a periodic inventory system.

-The Klara Kamberaj Department Store does not segregate its operating expenses into selling and administrative categories.

-All revenues, gains, expenses and losses are before tax.

-The Income Tax Rate is 40.0%.

Required -

1. Prepare a multi-step income statement for the year ended December 31, 20X0.

2. Prepare the required compound closing entries?