Use the unadjusted trial balance of Electric Bike on December 31, 2020.

Cash$8,400Accounts receivable22,965Merchandise inventory34,900Store supplies2,565Office supplies805Prepaid insurance3,555Equipment77,790Accumulated depreciation, equipment$13,955Accounts payable8,300Salaries payable0Braeden Li, capital174,215Braeden Li, withdrawals63,500Interest income340Sales530,500Sales returns and allowances5,370Cost of goods sold381,460Salaries expense96,600Rent expense29,400Supplies expense0Depreciation expense, equipment0Insurance expense0Totals$727,310$727,310

Required:

1.Record adjusting entries for the following information.

a.The records show that the equipment was estimated to have a total estimated useful life of 10 years with a residual value at the end of its life of $14,790.

b.The balance in the Prepaid Insurance account was reviewed and it was determined that $270 was unused at December 31, 2020.

c.A review of the store supplies on December 31, 2020, revealed a balance on hand of $2,090; a similar examination of the office supplies showed that $655 had been used.

d.Accrued salaries payable, $1,950.

e.A count of the merchandise inventory revealed a balance on hand December 31, 2020, of $34,070.

2.Prepare a multiple-step income statement showing the expenses in detail.