Huffman Department Store is located in midtown Metropolis. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company's fiscal year on November 30, 2008, the following accounts appeared in two of its trial balances.

Analysis reveals the following additional data. 

1. Salaries expense is 75% selling and 25% administrative. 

2. Insurance expense is 50% selling and 50% administrative. 

3. Rent expense, utilities expense, and property tax expense are administrative expenses. 

4. Notes payable are due in 2011.

Instructions 

(a) Prepare a multiple-step income statement, an owner's equity statement, and a classified balance sheet.

(b) Journalize the adjusting entries that were made.

(c) Journalize the closing entries that are necessary.

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Unadjusted Adjusted Unadjusted Adjusted Accounts Payable $ 47,310 $47,310 Interest Revenue $ 5,000 $ 5,000 Accounts Receivable 11,770 11,770 Merchandise Inventory 36,200 36,200 Accumulated Depr.-Delivery Equip. 15,680 19,680 Notes Payable 46,000 46,000 Accumulated Depr.-Store Equip. 32,300 41,800 Prepaid Insurance 13,500 4,500 Cash 8,000 8,000 Property Tax Expense 3,500 M. Huffman, Capital 84,200 84,200 Property Taxes Payable 3,500 Cost of Goods Sold 633,220 633,220 Rent Expense 19,000 19,000 Delivery Expense 8.200 8,200 Salaries Expense 120,000 120,000 Delivery Equipment 57,000 57,000 Sales 850,000 850,000 Depr. Expense--Delivery Equip. 4,000 Sales Commissions Expense 8,000 14,000 Depr. Expense-Store Equip. 9,500 Sales Commissions Payable 6,000 M. Huffman, Drawing 12,000 12,000 Sales Returns and Allowances 10,000 10,000 Insurance Expense 9,000 Store Equip. 125,000 125,000 Interest Expense 8,000 8,000 Utilities Expense 10,600 10,600