The following information applies to the questions displayed below.] Pastina Company sells various types of pasta to grocery chains as private label brands. The company's fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2018, appears below. Account Title Debits Credits Cash 44,950 Accounts receivable Supplies Inventory 60,000 1,950 79,000 31,200 Note receivable 0 Interest receivable Prepaid rent Prepaid insurance Office equipment Accumulated depreciation-office equipment Accounts payable Salaries and wages payable Note payable Interest payable 2,900 0 98,000 36,750 39,000 73,200 0 Deferred revenue Common stock 60,000 24,000 243,000 Retained earnings Sales revenue 0 Interest revenue Cost of goods sold Salaries and wages expense 109,350 20,700 15,950 Rent expense Depreciation expense C Interest expense C Supplies expense Insurance expense Advertising expense 1,450 6,600 3,900 475,950 475,950 Totals Information necessary to prepare the year-end adjusting entries appears below. 1. Depreciation on the office equipment for the year is $12,250. 2. Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through the end of the month. Salaries and wages earned from December 16 through December 31, 2018, were $1,750. 3. On October 1, 2018, Pastina borrowed $73,200 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, 2018, the company lent a supplier $31,200 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2019. 2018, the company paid an company $6,600 a two-year fire insurance policy. The en $6,600 was debited to insurance expense. 6. $1,040 of supplies remained on hand at December 31, 2018. 7. A customer paid Pastina $2,040 in December for 1,700 pounds of spaghetti to be delivered in January 2019. Pastina credited sales revenue. 8. On December 1, 2018, $2,900 rent was paid to the owner of the building. The payment represented rent for December 2018 and January 2019, at $1,450 per month. debit credit 1 Depreciation 12250 expense accumulated 12250 depreciation on equipment 2 salaries 1750 salary payable 1750 3 Interest 2196 [73200*12%]/12months Expense 3months interest accrued from October to December Interest 2196 Payable 4 Interest 2080 [31200*8%] /12months *10months interest accrued from march to receivable december. Interest 2080 Income st 5 prepaid [6600/24] *9months april to 4125 insurance december 2475 6600-2475= 4125 prepaid Insurance 4125 expense 6supply 910 [1950-1040] 910 supplies issued for use. expense supplies 910 7 sales 2040 revenue unearned 2040 sales revenue 8rent expense 1450 rent for december due.entire 2900 has been debited to prepaid rent. prepaid rent 1450 Income statement Amount in $ Sales 240960 [243000-2040] ADJUSTMENT Revenue NO.7 Cost of 109350 goods sold Gross profit [240960-109350] 131610 Operating expense Salaries and 22450 [20700+1750] Adjustment No.2 wages Rent 17400 [15950+1450] Adjustment No.8 Depreciation 12250 [adjustment no. 1 Supplies expense 2360 [1450+910] [6600-4125 Insurance 2475 expense Advertising 3900 expense Operating 70775 [131610-22450-17400-12250- Income 2360-2475-3900] Other Income Interest 2080 No.3 Revenue (2196) Interest No.4 Expense Net Income 70659 Pastina Company Journal Entries Credit ($) Accounts Title and Explanation Debit ($) Date Dec 31, 2018 Depreciation Expense 12250 Accumulated Depreciation-Office Equipment (To record the depreciation expense) 12250 Dec 31, 2018 Salaries and Wages Expense 1750 Salaries and Wages Payable 1750 (To record the accrued Salaries liability) Dec 31, 2018 Interest Expense (73200*12%*3/12) 2196 Interest Payable 2196 (To record the interest liability) Dec 31, 2018 Interest receivable (31200*8%*10/12) 2080 Interest Revenue 2080 (To record the interest receivable) Dec 31, 2018 Prepaid Insurance (6600*15/24) 4125 Insurance Expense 4125 (To record prepaid insurance) Dec 31, 2018 Supplies Expense (1950-1040) 910 Supplies (To record the supplies consumed) 910 Dec 31, 2018 Sales Revenue 2040 Deferred Revenue 2040 (To record the deferred revenue) Dec 31, 2018 Rent Expense (2900*1/2) 1450 Prepaid Rent 1450 (To record the rent expense for December) 4. Prepare the income statement, statement of shareholders' equity and classified balance sheet for the year ended December 31, 2018 Complete this question by entering your answers in the tabs below. Statement of Balance Sheet Income Statement SE Prepare the classified balance sheet for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.) PASTINA COMPANY Balance Sheet At December 31, 2018