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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

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.

Account Unadjusted Balance Account Unadjusted Balance
Accounts receivable $ 82,800 Land $ 140,000
Accum. deprec., building 135,000 Merchandise inventory 73,600
Accum. deprec., equipment 351,000 Mortgage payable 233,438
Advance sales 235,000 Sarah Golden, capital 226,222
Allowance for doubtful accounts 700 Note payable 176,000
Building 453,000 Other operating expenses 1,180,000
Cash 89,000 Sales 1,364,000
Equipment 657,000

Salaries & admin expense

41,560
Estimated warranty liability 5,100 Sales returns and allowances 9,500

Other information:

  1. Assume all accounts have a normal balance.
  2. 75% of the balance in the Advance Sales account is for wedding dresses to be made and delivered by Golden during 2021; the remaining 25% is from sales earned during 2020.
  3. Golden warranties its wedding dresses against defects and estimates its warranty liability to be 2% of adjusted net sales.
  4. The 3%, 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 $9,338 interest and $24,941 principal for a total of $34,279.
  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 $63,500.
  8. Sarah promised her operations manager a year-end performance bonus of $2,524, 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. (Be sure to list the assets and liabilities in order of their liquidity. Round the final answers to the nearest whole dollar amount.)

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