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Problem 5-4A Adjusting entries and multi-step income statement-perpetual LO5 Use the unadjusted trial balance of Electric Bike on December 31, 2020, Credit Debit $ 8,200 22,765 34,700 2,465 785 3,355 75,59 Cash Accounts receivable Merchandise inventory Store supplies Office supplies Prepaid insurance Equipment Accumulated depreciation, equipment Accounts payable Salaries payable Braeden Li, capital Braeden Li, withdrawals Interest income Sales Sales returns and allowances Cost of goods sold Salaries expense Rent expense Supplies expense Depreciation expense, equipment Insurance expense Totals $ 13, 755 8,100 0 170,715 62,500 5 320 529,500 5,170 381,260 96,400 29, 200 $722,390 $722,390 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 resale value at the end of its life of $14,590. b. The balance in the Prepaid Insurance account was reviewed and it was determined that $260 was unused at December 31, 2020, c. A review of the store supplies on December 31, 2020, revealed a balance on hand of $2,030, a similar examination of the office supplies showed that $645 had been used. d. Accrued salaries payable, $1,850. e. A count of the merchandise inventory revealed a balance on hand December 31, 2020, of $33,890. 2. Prepare a multiple-step income statement showing the expenses in detail. ELECTRIC BIKE Income Statement For Year Ended December 31, 2020 0 382,070 Operating expenses Total operating expenses 0 Other revenues and expenses: $ 0

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