On the designated worksheet, prepare the adjusting journal entries for the following items. Indent Credit account titles. Record journal entries in the order presented below:

• On June 1, 2018 a 24-month insurance policy was purchased for $36,000. (Note: The insurance policy is consumed for 7 months from June 1 to December 31 in 2018.)
• On January 1, 2018 Hullie & Oates paid Gretsky Advertising $48,000 for three years of advertising services. Equal services are provided each year.
• Hullie & Oates needed some additional storage space so on November 1, 2018 they rented a unit for an annual rate of $18,500. The entire amount was expensed when paid.
• $5,800 of store supplies were purchased during the year and the asset store supplies was increased. $3,000 of these supplies were used during the year.
• Depreciation for the year is based on straight line depreciation method for the following:
  • Store equipment Assets were held for the entire year; Residual Value = $10,000; Useful life is estimated to be 10 years.
  • Office equipment Assets were held for the entire year; Residual Value = $7,000; Useful life is estimated to be 2 years.
• Sales salaries of $8,400 and office salaries of $6,500 remained unpaid at 12/31/18, which have not been recorded for the year. (Note: In the adjusting journal entry, increase Sales Salaries Expense, Office Salaries Expense, and Salaries Payable.)
• The note payable was outstanding the entire year and a 5.5% interest rate (annual) exists on the note. No interest has been recorded for the year.
• Based on past experience, Hullie & Oates calculates bad debt expense at 1% of net sales for the year

After the above adjusting entries are entered. The amounts should be linked to the Adjustments columns (Columns D, E). Your adjustment amounts should be an Excel formula

Complete the Adjusted Trial Balance columns (Columns F, G) by the use of the Excel formula. Your last two columns should not contain constant numbers but should show numbers automatically generated from formulas. (Note: The adjusted trial balances of Cash and Accounts Receivable are shown in cells F7 and F8 as examples.)

Complete the multiple-step income statement. Your Income Statement should be in good form and well-formatted. Do your best designating between selling and administrative expenses. Use formulas in cells, not constant numbers. (That means, your income statement should be linked to the adjusted numbers in columns F and G in Table 1.)

Complete a Statement of Retained Earnings. Use formulas in cells, not constant numbers.

Complete a Classified Balance Sheet as of 12/31/18. Use formulas in cells, not constant numbers.

J K L 5 Account Title Hullie & Oates Company End of Period Worksheet For the Year Ended December 31, 2018 Unadjusted Trial Balance Adjustments DR CR DR CR 45,000 72,850 4.000 160,500 36,000 48,000 Adjusted Trial Balance DR 45,000 72,850 CR Note: If no adjustment is required, the Adjusted Trial Balance = Unadjusted Trial Balance. 5,800 350.000 40,050 125,000 17,200 85,200 . 146,000 60,000 355,400 7 Cash 8 Accounts Receivable 9 Allowance for Doubtful Accounts 10 Merchandise Inventory 11 Prepaid Insurance 12 Prepaid Advertising 13 Prepaid Rent 14 Store Supplies 15 Store Equipment 16 Accumulated Depreciation - Store Equipment 17 Office Equipment 18 Accumulated Depreciation - Office Equipment 19 Accounts Payable 20 Salaries Payable 21 Interest Payable 22 Note Payable (final payment due 2022) 23 Common Stock 24 Retained Earnings 25 Dividends 26 Sales 27 Sales Returns and Allowances 28 Sales Discounts 29 Cost of Goods Sold 30 Sales Salaries Expense 31 Advertising Expense 32 Depreciation Expense - Store Equipment 33 Store Supplies Expense 34 Miscellaneous Selling Expense 35 Office Salaries Expense 36 Rent Expense 37 Insurance Expense 38 Depreciation Expense - Office Equipment 39 Interest Expense 40 Bad Debt Expense 41 Total 42 25,000 788,350 12,800 8,300 457,200 94,650 2.600 18,500 1,496,200 1,496,200