Bob’s Chocolate Chips and More, a bakery specializing in gourmet pizza and chocolate chip cookies, started business October 1, 2008. The following transactions occurred during the month.

a. Common stock of \($90,000\) was sold to start the business.

b. Equipment consisting of mixers and ovens was acquired October 1 for \($30,000\) cash. The equipment is expected to last five years and can be sold at that time for \($5,000\). Management uses the straight-line method to calculate depreciation expense.

c. Ingredients costing \($15,000\) were purchased on account during the month and all but \($5,000\) was paid for by the end of the month.

d. Rent is \($500\) a month. October, November, and December’s rent was paid October 5.

e. A payment of \($800\) for utilities was made during the month.

f. Sixty percent of the ingredients purchased in part c were prepared and sold for \($35,000\) on account; \($26,000\) was collected on accounts receivable during the month.
g. Wages of \($5,200\) were paid during the month. Moreover, wages for the last three days of the month amounted to \($400\) and will be paid during the first week of November.
h. Borrowed \($12,000\) from the bank for additional working capital requirements, and \($3,000\) was repaid by month-end. Interest on the unpaid loan balance amounted to \($450\) at the end of October and was paid on November 5.
Required:
Prepare the required journal entries and adjusting entries as well as an income statement and a balance sheet for Bob's Chocolate Chips and More as of October 31, 2008. (Hint: You may want to consider using T-accounts to classify and accumulate the preceding transactions before preparing the statements.)