Use the unadjusted trial balance of Electric Bike on December 31, 2020.
Debit Credit
Cash $ 8,800
Accounts receivable 23,365
Merchandise inventory 35,300
Store supplies 2,765
Office supplies 845
Prepaid insurance 3,955
Equipment 82,190
Accumulated depreciation, equipment $ 14,355
Accounts payable 8,700
Salaries payable 0
Braeden Li, capital 181,215
Braeden Li, withdrawals 65,500
Interest income 380
Sales 532,500
Sales returns and allowances 5,770
Cost of goods sold 381,860
Salaries expense 97,000
Rent expense 29,800
Supplies expense 0
Depreciation expense, equipment 0
Insurance expense 0
Totals $ 737,150 $ 737,150
Required:
1. Record adjusting entries for the following information.
a. The records show that the equipment was estimated to have a total estimated useful life of 10 years with a residual value at the end of its life of $15,190.
b. The balance in the Prepaid Insurance account was reviewed and it was determined that $290 was unused at December 31, 2020.
c. A review of the store supplies on December 31, 2020, revealed a balance on hand of $2,210; a similar examination of the office supplies showed that $675 had been used.
d. Accrued salaries payable, $2,150.
e. A count of the merchandise inventory revealed a balance on hand December 31, 2020, of $34,430.
2. Prepare a multiple-step income statement showing the expenses in detail.