Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2024, appears below.

Account TitleDebitsCreditsCash$ 35,500Accounts receivable43,000Supplies3,000Inventory63,000Notes receivable23,000Interest receivable0Prepaid rent2,500Prepaid insurance9,000Office equipment92,000Accumulated depreciation$ 34,500Accounts payable34,000Salaries payable0Notes payable53,000Interest payable0Deferred sales revenue3,500Common stock81,000Retained earnings36,000Dividends7,000Sales revenue161,000Interest revenue0Cost of goods sold85,000Salaries expense20,400Rent expense12,500Depreciation expense0Interest expense0Supplies expense2,600Insurance expense0Advertising expense4,500Totals$ 403,000$ 403,000

Information necessary to prepare the year-end adjusting entries appears below.

1. Depreciation on the office equipment for the year is $11,500.
2. Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2024, were $1,550.
3. On October 1, 2024, Pastina borrowed $53,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
4. On March 1, 2024, the company lent a supplier $23,000, and a note was signed requiring principal and interest at 8% to be paid on February 28, 2025.
5. On April 1, 2024, the company paid an insurance company $9,000 for a one-year fire insurance policy. The entire $9,000 was debited to prepaid insurance at the time of the payment.
6. $920 of supplies remained on hand on December 31, 2024.
7. The company received $3,500 from a customer in December for 1,500 pounds of spaghetti to be delivered in January 2025. Pastina credited deferred sales revenue at the time cash was received.
8. On December 1, 2024, $2,500 rent was paid to the owner of the building. The payment represented rent for December 2024 and January 2025 at $1,250 per month. The entire amount was debited to prepaid rent at the time of the payment.

Required:

1 to 3. First, post the unadjusted balances from the unadjusted trial balance that was given and the adjusting entries that were made in Problem 2-3 into the appropriate T-accounts (on the T-accounts tab). Then prepare an adjusted trial balance.

4-a. Prepare an income statement for the year ended December 31, 2024. Assume that no common stock was issued during the year and that $7,000 in cash dividends were paid to shareholders during the year.

4-b. Prepare a statement of shareholders' equity for the year ended December 31, 2024. Assume that no common stock was issued during the year and that $7,000 in cash dividends were paid to shareholders during the year.

4-c. Prepare a classified balance sheet as of December 31, 2024. Assume that no common stock was issued during the year and that $7,000 in cash dividends were paid to shareholders during the year.

5. Prepare closing entries and post to the T-accounts (on the T-accounts tab).

6. Prepare a post-closing trial balance.