• P5.7A (LO 4, 5) AP The unadjusted trial balance of World Enterprises for the year ending December 31, 2021, follows: WORLD ENTERPRISES Trial Balance December 31, 2021 Debit Credit Cash $ 15,000 Accounts receivable 19,200 Merchandise inventory 37,050 Prepaid insurance 3,000 Supplies 2,950 Equipment 150,000 Accumulated depreciation—equipment $ 35,000 Furniture 45,000 Accumulated depreciation—furniture 18,000 Accounts payable 33,200 Unearned revenue 4,000 Mortgage payable 125,000 S. Kim, capital 46,200 S. Kim, drawings 48,000 Sales 265,000 Sales returns and allowances 2,500 Sales discounts 3,275 Cost of goods sold 153,000 Interest expense 6,875 Salaries expense 35,450 Utilities expense 5,100 $526,400 $526,400 Additional information: 1. There is $750 of supplies on hand on December 31, 2021. 2. The one-year insurance policy was purchased on March 1, 2021. 3. Depreciation expense for the year is $10,000 for the equipment and $4,500 for the furniture. 4. Accrued interest expense at December 31, 2021, is $675. 5. Unearned revenue of $975 is still unearned at December 31, 2021. On the sales that were earned, cost of goods sold was $1,750. 6. A physical count of merchandise inventory indicates $32,750 on hand on December 31, 2021. 7. Global uses the perpetual inventory system and the earnings approach. Instructions a. Prepare the adjusting journal entries assuming they are prepared annually and update account balances. b. Prepare a multiple-step income statement.