Golden Wedding Dress Company designs custom wedding dresses for brides to be. The person preparing the adjusting entries at year-end was unable to complete the adjustments due to illness. You have been given the following unadjusted trial balance along with some additional information for the December 31, 2020, year end.

Other information:

1. Assume all accounts have a normal balance.

2. 80% of the balance in the Advance Sales account is for wedding dresses to be made and delivered by Golden during 2021; the remaining 20% is from sales earned during 2020.

3. Golden warranties its wedding dresses against defects and estimates its warranty liability to be 3% of adjusted net sales.

4. The 4%, 5-year note payable was issued on October 1, 2020; interest is payable annually each September 30.

5. The mortgage is paid annually on the first day of the next year. The next mortgage payment will be paid consisting of $9,207 interest and $24,672 principal for a total of $33,879.

6. Uncollectible accounts are estimated to be 1.5% of outstanding receivables.

7. A physical count of the inventory showed a balance actually on hand of $63,100.

8. Sarah promised her operations manager a year-end performance bonus of $3,475, which would be paid with her salary in January for high sales achieved this year.

Required

1. Based on the information provided, journalize the adjusting entries at December 31, 2020.

2. Prepare a classified balance sheet (round all values on the balance sheet to whole numbers).

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Unadjusted Balance Unadjusted Balance Account Account $ 83,000 Land. Merchandise inventory. Mortgage payable . Sarah Golden, capital.. Note payable . Other operating expenses. Sales. Salaries & admin expense. Sales returns and allowances $ 136,000 Accounts receivable. Accum. deprec., building. Accum. deprec., equipment. Advance sales. Allowance for doubtful accounts Building. Cash. 131,000 72,800 230,188 240,252 165,000 1,176,000 1,360,000 231,000 600 445,000 88,600 Equipment. Estimated warranty liability 649,000 4,700 50,240 9,100