Baltic Supplies Unadjusted Trial Balance as at December 31st, 2018 is as follows:

cash 620,000 Accounts receivable 410,000 Merchandise Inventory 480,000 Store Supplies 144,800 prepaid insurance expense 840,000 Building and equipment 2,000,000 Accumulated Depreciation-Building and Equipment 976,000 Accounts Payable 680,000 Travelling Expense Payable Unearned sales Revenue 450,000 Note Payable-Long Term 213,800 Baltic,Capital 1,700,000 Baltic withdrawal 35,000 Sales revenue earned 2,550,500 Sales discount 45,100 sales returns and allowances 62,500 cost of goods sold 401,000 salaries expense 430,000 telephone expense 85,000 Depreciation expense-Building and Equipment Insurance Expense 630,000 Store supplies expense 130,000 electricity expense 105,000 Bad Debt expense 65,400 Travelling Expense 25,000 Interest Expense 61,500 Total 6,570,300

The following additional information was made available at December 31, 2018

a) Unearned sales revenue, still NOT earned at December 31, 2018 amounted $65,500.

b) The prepaid insurance of $840,000 was paid on July 1, 2018 for 8-months to February 2019.

c) The Building and Equipment has an estimated life of ten (10) years and is being depreciated on the double declining balance method of depreciation, down to a residual value of $10,000.

d) Accrued travelling expense amounted to $8,800 at December 31, 2018.

e) A physical count of inventory at December 31, 2018, reveals $485,000 worth of inventory on hand.

Required:

1. Prepare the necessary adjusting entries on December 31, 2018.

2. Prepare the companys Multiple-step Income Statement for the year ended December 31, 2018.

3. Prepare the companys Statement of Owners Equity for the year ended December 31, 2018

4. Prepare the companys classified Balance Sheet at December 31, 2018.