* P5.13A (LO 7) AP The following is an alphabetical list of Bud's Bakery's adjusted account balances at the end of the company's fiscal year on November 30, 2021: Prepare financial statements and closing entries-periodic system and earnings approach. Accounts payable $ 32,310 Merchandise inventory $ 34,360 Accounts receivable 13,770 Mortgage payable 106,000 Accumulated depreciation-building 61,200 Prepaid insurance 4,500 Accumulated depreciation-equipment 19,880 Property tax expense 3,500 Building 175,000 Purchases 634,700 B. Hachey, capital 104,480 Purchase discounts 6,300 B. Hachey, drawings 12,000 Purchase returns and allowances 13,315 Cash 8,500 Rent revenue 2,800 Depreciation expense 14,000 Salaries expense 122,000 Equipment 57,000 Salaries payable 8,500 Freight in 5,060 Sales 872,000 Freight out 8,200 Sales discounts 8,250 Insurance expense 9,000 Sales returns and allowances 9,845 Interest expense 5,300 Unearned revenue 3,000 Land 85,000 Utilities expense 19,800 Additional facts: 1. Bud's Bakery uses a periodic inventory system. 2. Of the mortgage payable, $8,500 is due on March 31, 2022. 3. A physical count determined that merchandise inventory on hand at November 30, 2021, was $37,350. 4. The owner made no capital contributions during the year. Instructions a. Prepare a multiple-step income statement, statement of owner's equity, and classified balance sheet for the November 30, 2021, year end. b. Prepare the closing journal entries. c. Post closing entries to the Merchandise Inventory and capital accounts. Check that the balances in these accounts are the same as the amounts on the balance sheet. Taking It Further If you had not been told that Bud's Bakery uses a periodic inventory system, how could you have dete is available in a periodic inventory system that is not available in a perpetual inventory system? We've updated our read aloud feature! Give it a try here