Use the unadjusted trial balance of Jumbos on December 31, 2017.

	Debit		Credit
Cash	$	7,100
Accounts receivable		21,665
Merchandise inventory		33,600
Store supplies		1,915
Office supplies		975
Prepaid insurance		5,255
Equipment		63,490
Accumulated depreciation, equipment			$	12,655
Accounts payable				7,000
Salaries payable				0
Sally Fowler, capital				154,765
Sally Fowler, withdrawals		57,000
Interest income				210
Sales				524,000
Sales returns and allowances		4,070
Cost of goods sold		380,160
Salaries expense		95,300
Rent expense		28,100
Supplies expense		0
Depreciation expense, equipment		0
Insurance expense		0
Totals	$	698,630	$	698,630

Required: 1. Record adjusting entries for the following information. a. A review of the store supplies on December 31, 2017, revealed a balance on hand of $1,700; a similar examination of the office supplies showed that $740 had been used. b. The balance in the Prepaid Insurance account was reviewed and it was determined that $355 was unused at December 31, 2017. c. 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 $13,490. d. Accrued salaries payable, $1,300. e. A count of the merchandise inventory revealed a balance on hand December 31, 2017, of $32,900.

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