The unadjusted trial balance for Mitchell Pharmacy appears below.

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 the next year.

b$.$ Depreciation expense for the current year is $$10,130.$

c$.$ Four months' interest at $10\%$ is owed but unrecorded and unpaid on the note 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:

Prepare the adjusting entries.

Prepare a single$-$step income statement, a retained earnings statement, and a classified balance sheet using adjusted account balances.

Conceptual Connection: Why would you not want to prepare financial statements until after the adjusting entries are made?