Maine Department Store is located near the Village Shopping Mall. At the end of the company’s calendar year on December 31, 2010, the following accounts appeared in two of its trial balances.

Instructions

(a) Prepare a multiple-step income statement, an owner’s equity statement, and a classified balance sheet. $20,000 of the mortgage payable is due for payment next year.

(b) Journalize the adjusting entries that were made.

(c) Journalize the closing entries that are necessary.

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Unadjusted Adjusted $ 79,300 Unadjusted Adjusted $ 8,000 4,000 75,000 $ 79,300 Interest Payable 50,300 Interest Revenue 52,500 Merchandise Inventory Mortgage Payable Accounts Payable |Accounts Receivable |Accumulated Depr.-Building |Accumulated Depr.-Equipment Building Cash B. Maine, Capital Cost of Goods Sold Depr. Expense-Building Depr. Expense-Equipment 75,000 42,100 29,600 80,000 32,000 9,600 80,000 190,000 Office Salaries Expense 190,000 23,800 176,600 412,700 32,000 2,400 4,800 4,800 23,800 Prepaid Insurance 176,600 Property Tax Expense 412,700 Property Taxes Payable 10,400 Sales Salaries Expense 76,000 628,000 10,200 76,000 628,000 Sales 28,000 13,300 B. Maine, Drawing Equipment 28,000 Sales Commissions Expense 14,500 4,300 8,000 12,000 1,000 110,000 Sales Commissions Payable 110,000 7,200 Sales Returns and Allowances 8,000 Insurance Expense Interest Expense 3,000 11,000 11,000 Utilities Expense Payable