Problem 3-73B Adjusting Entries and Financial Statements Objective 4, 5 The unadjusted trial balance for Mitchell Pharmacy appears below. Mitchell Pharmacy Unadjusted Trial Balance December 31, 2018 Debit Account Credit S 3.400 64,820 583.400 11.200 230,000 S 44.000 Cash Accounts Receivable Inventory Prepaid Insurance Building Accumulated Depreciation (Building) Land Other Assets Accounts Payable Notes Payable (due 2020) Common Shares Retained Earnings, 12/31/2017 Service Revenue Wages Expense Interest Expense Total 31,200 25.990 47,810 150.000 600,000 41.200 950,420 871.420 12.000 $1.833.430 51.833.430 The following information is available at year-end for adjustments a. An analysis of insurance policies indicates that $2,180 of the prepaid insurance is coverage for 2019. b. Depreciation expense for 2018 is $10,130. c. Four months' interest at 10% is owed but unrecorded and unpaid on the notes payable. d. Wages of $4,950 are owed but unpaid and unrecorded at December 31. e. Income taxes of $11,370 are owed but unrecorded and unpaid at December 31. Required: 1. Prepare the adjusting entries. 2. Prepare a statement of earnings, a statement of retained earnings, and a statement of financial position using adjusted account balances. Answer Check Figure: Total operating expenses = $923,890. Ending retained earnings = $67,730. Total current liabilities = $69,130. 3. Conceptual Connection Why would you not want to prepare financial statements until after the adjusting entries are made