P5-3A Maine Department Store is located near the Village Shopping Mall. At the end of the

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P5-3A Maine Department Store is located near the Village Shopping Mall. At the end of the
company’s fiscal year on December 31, 2008, the following accounts appeared in two of its trial
balances.

Accounts Payable $ 79,300 $ 79,300
Accounts Receivable 50,300 50,300
Accumulated Depr.—Building 42,100 52,500
Accumulated Depr.—Equipment 29,600 42,900
Building 190,000 190,000
Cash 23,800 23,800
Common Stock 116,600 116,600
Cost of Goods Sold 412,700 412,700
Depr. Expense—Building 10,400
Depr. Expense—Equipment 13,300
Dividends 28,000 28,000
Equipment 110,000 110,000
Insurance Expense 7,200
Interest Expense 3,000 11,000
Interest Payable 8,000
Unadjusted Adjusted
Interest Revenue $ 4,000 $ 4,000
Merchandise Inventory 75,000 75,000
Mortgage Payable 80,000 80,000
Office Salaries Expense 32,000 32,000
Prepaid Insurance 9,600 2,400
Property Tax Expense 4,800
Property Taxes Payable 4,800
Retained Earnings 60,000 60,000
Sales Salaries Expense 76,000 76,000
Sales 628,000 628,000
Sales Commissions Expense 10,200 14,500
Sales Commissions Payable 4,300
Sales Returns and Allowances 8,000 8,000
Utilities Expense 11,000 12,000
Utilities Expense Payable 1,000
Analysis reveals the following additional data.

1. Insurance expense and utilities expense are 60% selling and 40% administrative.
2. $20,000 of the mortgage payable is due for payment next year.
3. Depreciation on the building and property tax expense are administrative expenses; depreciation
on the equipment is a selling expense.

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.