Following is the information you will need to make your adjusting entries: 1. Office equipment has a life of five years with no residual value. 2. Store equipment has a life of five years with no residual value. 3. Shop equipment has a life of ten years with no residual value (assume new equipment was purchased Jan. 1.) 4. A physical inventory of Merchandise Inventory, Parts revealed an actual balance of $97,000. 5. A physical inventory of Merchandise Inventory, Motorcycles revealed that the balance was accurate. 6. Office supplies in the amount of $1,500 were used throughout the year. 7. Salaries should be accrued as follows: a. Sales - $3,000 b. Service - $5,000 c. Office - $1,500 8. Insurance in the amount of $1,200 was used throughout the year. 9. Interest on the Note Payable is 8% (assume new note was taken out on Jan. 1.) Once you have completed the adjusting entries, prepare your closing entries.

Big Ed's Motorcycle Shop Trial Balance For the Period Ended December 31, 20x8 Cash Accounts Receivable Merchandise Inventory, Parts Merchandise Inventory, Motorcycles Office Supplies Prepaid Insurance Office Equipment Accumulated Depreciation-Office Equipment Store Equipment Accumulated Depreciation-Store Equipment Shop Equipment Accumulated Depreciation-Shop Equipment Accounts Payable Salaries Payable Interest Payable Note Payable (due 2010) Ed Silver, Capital Ed Silver, Drawing Sales Cost of Merchandise Sold Sales Salaries Expense Service Salaries Expense Office Salaries Expense Advertising Expense Depreciation Expense-Office Equipment Depreciation Expense-Store Equipment Depreciation Expense-Shop Equipment Miscellaneous Selling Expense Rent Expense Insurance Expense Interest Expense Office Supplies Expense Miscellaneous Administrative Expense Unadjusted Trial Balance DR CR 184,500 145,200 100,000 110,000 6,720 4,080 50,000 7,500 52,000 7,860 183,600 41,040 66,720 67,200 534,180 42,000 1,488,000 930,000 207,840 100,980 52,560 1,920 37,620 1,560 1,920 2,212,500 2,212,500 Big Ed's Motorcycle Shop Trial Balance For the Period Ended December 31, 20x7 Cash Accounts Receivable Merchandise Inventory, Parts Merchandise Inventory, Motorcycles Office Supplies Prepaid Insurance Office Equipment Accumulated Depreciation-Office Equipment Store Equipment Accumulated Depreciation-Store Equipment Shop Equipment Accumulated Depreciation-Shop Equipment Accounts Payable Salaries Payable Interest Payable Note Payable (due 2010) Ed Silver, Capital DR 81,900 179,200 115,000 71,980 4,220 1,880 50,000 CR 7,500 52,000 7,860 168,600 724,780 41,040 65,000 7,500 4,500 57,200 534,180 724,780