) The warehouse employees counted the ending inventory on handat December 31, 2003. Their ending inventory balance is $40,000.(Remember we are using the periodic inventory method.)2) Thesupplies department counted the supplies on hand. The balance ofsupplies at December 31 is $600. 3) The note payable is due in 5years and was initiated on April 1, 2003. The note payable requiresannual interest payments of 10% payable on March 31 of each year.(Note: I used 275 days out of 365 to prorate the interest expenseon the note payable)4) The company has estimated that bad debtexpense is equal to one half of a percent (.005) of net sales(sales less sales discounts and returns) .5) December salaries andwages will be paid on January 5, 2004. December salaries and wagesare $5,000. 6) Two of the fixed assets have not been completelydepreciated. These two items are a mainframe computer purchased for$20,000 in 2002 and a personal computer purchased in the currentyear on October 1, 2003 for $3,000. Computers are depreciated usingthe straight line method over 3 years. The salvage value is 0.7)The company’s income tax rate is 15%. (For taxes most companiescomplete the other adjusting entries and then post them to the GL.Then prepare a preliminary income statement and calculate thetaxes. Then they can make the adjusting entry for taxes and post tothe general ledger).Instructions: 1) Prepare the adjusting entriesfor December 31, 2003. These entries should be recorded in thegeneral journal. Provide any necessary calculations to support yourentries. Note: Don’t forget to put the income tax adjusting journalentry in the general journal and post it to the general ledger. 2)Post these entries to General Ledger and prepare a trialbalance.