Apply the accrual basis of accounting to correctly create adjusting entries in the preparation of financial statements:

A. Step Five: Prepare the unadjusted trial balance. Note that you should use the T account balances completed in the previous step to prepare the unadjusted trial balance portion of the Trial Balance tab in your workbook.

B. Step Six: Complete the Adjusting Entries tab in your workbook using the Step Six data in the appendix. Note that you should take the adjusting entries from this worksheet and enter them into the Trial Balance tab in your workbook.

C. Step Seven: Apply adjusting entries to create the adjusted trial balance. Note that the adjusting entries from Step Six will apply to affected accounts in the unadjusted trial balance to arrive at the adjusted trial balance.

Trial Balance:

Peyton Approved

Trial Balance

2018

Unadjusted trial balance Adjusting entries Adjusted trial balance Account Debit Credit Debit Credit Debit Credit

Cash 0 0

Baking Supplies 0 0

Merchandise Inventory (FIFO)0 0

Prepaid Rent 0 0

Prepaid Insurance 0 0

Baking Equipment 0 0

Accumulated Depreciation 250 250

Office Supplies 0 0

Accounts Receivable 0 0

Notes Payable 0 0

Interest Payable 0

Accounts Payable 0 0

Wages Payable 0 0

Common Stock 0 0

Dividends 0 0

Bakery Sales 0 0

Merchandise Sales 0 0

Baking Supplies Expense 0

Rent Expense 0 0

Interest Expense 0

Insurance Expense 0

Depreciation Expense 250 250

Misc. Expense 0 0

Office Supplies Expense 0

Business License Expense0 0

Advertising Expense 0 0

Wages Expense 0 0

Telephone Expense 0 0

COGS (FIFO) 0 0

Total: (FIFO) 0 0 250 250 250 250

rt of Accounts July Journal Entries August Journal Peyton Approved General Journal Entries Jul-18 Credit Debit 10,000 10,000 $6,500 $6,500 $10.000 $10.000 $1,500 $1,500 $375 $375 $250 $250 $6,000 Date Accounts 1-Jul Cash Common Stock July 1 Baking Supplies Accounts Payable July 3 Cash 6% Note Payble July, 7 Prepaid Rent Cash July 10 Liccensing Fee Cash July, 11 Miscellaneous Expense Cash July, 13 Baking Equipment Common Stock July, 13 Advertising Expense Cash July 14 Office Supplies Cash July 30 Telephone Expense Accounts Payable July 31 Prepaid Insurance Cash July 31 Salaries Expense Salaries Payable July 31 Cash Accounts Receivable Sales $6.000 $200 $200 $300 $300 $75 $75 $2,400 $2,400 $120 $120 $10,000 $5,000 $15,000 Total 52,720 52.720 art of Accounts July Journal Entries August Journal E Peyton Approved General Journal Entries Aug-18 Credit Date Aug. 5 Debit $120 $120 Aug. 8 $3.800 $2.800 Aug. 10 $75 $75 Aug. 15 $5,000 $5,000 Aug. 15 $480 $480 Aug. 18 Accounts Salaries Payable Cash Cash Accounts Receivable Accounts Payable Cash Baking Supplies Accounts Payable Salaies Expense Salaries Payable Cash Accounts Receivable Accounts Payable Cash Office Supplies Cash Telephone Expense Accounts Payable Salaries Expense Salaries Payable Cash Accounts Receivable Sales $3.000 $3.000 Aug. 20 $8,500 $8.500 Aug. 22 $300 $300 Aug. 31 $75 $75 Aug, 31 $420 $420 Aug. 31 $12,500 $7.500 20.000 Total 41.770 40.770 Chart of Accounts July Journal Entries August Journal Entries Peyton Approved General Journal Entries Sep-18 Credit Debit 10.000 10.000 $420 420 75 75 7.000 7.000 5.000 5.000 Date Accounts 1-Sep Dividend Cash Sep. 5 Salaries Payable Cash 8-Sep accounts payable cash Sep, 11 Baking Supplies accounts payable sep 13 accounts payable cash 15-Sep salaries expense salaries payable sept. 15 rent expense cash 20-Sep salaries payable cash sept. 30 salaries expense salaries payable sept, 30 cash accounts receivable sales 456 456 1,500 1,500 456 480 480 14.000 6.000 20.000 Total 45,387 45,387