New York Bakery

Trial Balance

December 31, 2020

Debit Credit

Cash $ 19,000

Accounts Receivable 31,500

Allowance for Doubtful Accounts $ 700

Inventory 30,000

Prepaid Insurance 5,100

Furniture and Equipment 84,000

Accumulated DepreciationFurniture and Equipment 40,000

Notes Payable 28,000

Common Stock 50,600

Retained Earnings 35,000

Sales 600,000

Cost of Goods Sold 408,000

Sales Salaries Expense 85,000

Advertising Expense 6,700

Administrative Salaries Expense 80,000

Office Expense 5,000

$754,300 $754,300

Instructions:

(a) Construct T-accounts and enter the balances shown.

(b) Create a 10 column worksheet using Excel (follow the sample on page 3-47, appendix illustration 3C.1). ALL the calculations on the worksheet must be done using formulas (vertical and horizontal). You must format the worksheet so it prints out on a single sheet of paper (81/2 x 11, Landscape).

1. Bad debt expense is estimated to be $1,550.

2. Furniture and equipment is depreciated is $500 per month.

3. Insurance expired during the year $700.

4. Interest accrued on notes payable $3,630.

5. Sales salaries earned but not paid $1,500.

6. Advertising paid in advance $3,600.

7. Office supplies on hand $2,400, charged to Office Expense when purchased.

8. Ending Inventory is $29,500

9. Income Tax Expense is 20% of Income before Income Tax

The cash account should not be adjusted, it is correct as stated.

(c) Prepare a General Journal showing the adjusting journal entries from the worksheet. (Omit explanations.) Open additional T-accounts as necessary. (Assume a December 31 year-end)

(d) Post adjusting entries to the T-accounts. Be sure to recalculate the new ending balances for each account after adjusting entries are posted and again after closing entries are posted.

(e) Prepare closing entries.

(f) Post closing entries to the T-accounts; be sure to recalculate the new ending balances for each account