Item4

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Item 4

Problem 5-4A Adjusting entries and multi-step income statementperpetual LO5

Use the unadjusted trial balance of Electric Bike on December 31, 2023.

	Debit		Credit
Cash	$	7,300
Accounts receivable		21,865
Merchandise inventory		33,800
Store supplies		2,015
Office supplies		955
Prepaid insurance		5,055
Equipment		65,690
Accumulated depreciation, equipment				$	12,855
Accounts payable					7,200
Salaries payable					0
Braeden Li, capital					157,825
Braeden Li, withdrawals		58,000
Interest income					230
Sales					525,000
Sales returns and allowances		4,270
Cost of goods sold		380,360
Salaries expense		95,500
Rent expense		28,300
Supplies expense		0
Depreciation expense, equipment		0
Insurance expense		0
Totals	$	703,110		$	703,110

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 $13,690. b. The balance in the Prepaid Insurance account was reviewed and it was determined that $345 was unused at December 31, 2023. c. A review of the store supplies on December 31, 2023, revealed a balance on hand of $1,760; a similar examination of the office supplies showed that $730 had been used. d. Accrued salaries payable, $1,400. e. A count of the merchandise inventory revealed a balance on hand December 31, 2023, of $33,080.