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RST Corporation provided these account balances on February 28, 2024: Cash: $20,000 Accounts Receivable: $18,000 Inventory: $12,000 Accounts Payable: $9,000 Salaries Payable: $3,200 Building: $80,000

RST Corporation provided these account balances on February 28, 2024:

  • Cash: $20,000
  • Accounts Receivable: $18,000
  • Inventory: $12,000
  • Accounts Payable: $9,000
  • Salaries Payable: $3,200
  • Building: $80,000
  • Accumulated Depreciation: $15,000
  • Mortgage Payable: $40,000
  • Common Stock: $25,000
  • Retained Earnings: $40,800

Requirements:

  1. Prepare a trial balance.
  2. Journalize adjusting entries for:
    • Depreciation expense: $5,000
    • Inventory adjustment: $2,000
  3. Prepare an adjusted trial balance.
  4. Create a statement of owner's equity.
  5. Describe the purpose of a statement of owner's equity.

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