Use the information presented in Problem 5-5A for Idaho Sales, Inc., in solving this problem. However, in satisfying the following requirements, use the adjusting entry approach to accounting for merchandise inventories.

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1. Copy the unadjusted trial balance on a work sheet form and complete the work sheet. (Note the adjustments information presented in Requirement 1 of Problem 5-5A.)

2. Prepare a multiple-step classified income statement showing in detail the expenses and the items that make up cost of goods sold.

3. Prepare a retained earnings statement.

4. Prepare adjusting and closing entries for the corporation.

5. In addition to the foregoing, prepare a single-step statement of income and retained earnings with the items condensed as is commonly done in published statements.