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, 2023, 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 2024; the remaining 20% is from sales earned during 2023.

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, 2023; 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, 2023.

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

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Account Accounts receivable............ Accum. deprec., building........... Accum. deprec., equipment... Advance sales.... Allowance for doubtful accounts....... 600 Building........... Cash............ Equipment............ Estimated warranty liability......... Land............... Merchandise inventory................ Mortgage payable............ Note payable......... Other operating expenses......... Unadjusted Balance $ 83,000 Sales.............. Salaries & admin expense.......... Sales returns and allowances..... Sarah Golden, capital................ 131,000 347,000 231,000 445,000 88,600 649,000 4,700 136,000 72,800 230,188 165,000 1,176,000 1,360,000 50,240 9,100 240,252