Metro Department Store is located in midtown Metropolis. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company's fiscal year on November 30, 1998, the following accounts appeared in two of its trial balances:

Analysis reveals the following additional data:
1. Salaries expense is \(70 \%\) selling and \(30 \%\) administrative.
2. Insurance expense is \(50 \%\) selling and \(50 \%\) administrative.
3. Rent expense, utilities expense, and property tax expense are administrative expenses.
4. Notes payable are due in 2002.
\section*{Instructions}

(a) Prepare a multiple-step income statement, a retained earnings statement, and a classified balance sheet.

(b) Journalize the adjusting entries that were made.

(c) Journalize the closing entries that are necessary.

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Unadjusted Trial Balances Adjusted Accounts Payable Accounts Receivable Accumulated Depreciation-Delivery Equipment Accumulated Depreciation-Store Equipment Cash $ 37,310 $ 37,310 11,770 11,770 15,680 19,680 32,300 41,800 8,000 8,000 Common stock 70,000 70,000 Cost of Goods Sold 633,220 633,220 Delivery Expense 8,200 8,200 Delivery Equipment 57,000 57,000 Depreciation Expense-Delivery Equipment 4,000 Depreciation Expense-Store Equipment 9,500 Dividends 12,000 12,000 Insurance Expense 9,000 Interest Expense Interest Revenue Merchandise Inventory Notes Payable 8,000 8,000 5,000 5,000 36,200 36,200 46,000 46,000 Prepaid Insurance 13,500 4,500 Property Tax Expense 3,500 Property Taxes Payable 3,500 Rent Expense 19,000 19,000 Retained Earnings 14,200 14,200