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

DebitCredit Cash $7,300Accounts receivable$21,865Merchandise inventory$33,800Store supplies$2,015Office supplies$955Prepaid insurance$5,055Equipment$65,690Accumulated depreciation, equipment$12,855 Accounts payable$7,200Salaries payable $0Braeden Li, capital$157,825Braeden Li, withdrawals$58,000Interest income$230Sales$525,000Sales returns and allowances $4,270Cost of goods sold $380,360Salaries expense$95,500Rent expense $28,300Supplies expense $0Depreciation expense, equipment$0Insurance expense $0Totals $703,110 $703,110

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 $13,690.

b.The balance in the Prepaid Insurance account was reviewed and it was determined that $345 was unused at December 31, 2020.

c.A review of the store supplies on December 31, 2020, revealed a balance on hand of $1,760; a similar examination of the office supplies showed that $730 had been used.

d.Accrued salaries payable, $1,400.

e.A count of the merchandise inventory revealed a balance on hand December 31, 2020, of $33,080.

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