Please help with steps 5-7! I am trying to complete the adjusting trial entries. Please complete the adjusting entries if possible. Thanks!
II. 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. On September 30, the following adjustments must be made: (Note: This is a sample.) Depreciation of baking equipment transferred to company on 7/13. Assume a half month of depreciation in July using the straight-line method. Accrue interest for note payable. Assume a full month of interest for July. (6% annual interest on $10,000 loan from parents.) Record insurance used for the year. Actual baking supplies on-hand as of September 30 are $1,100. Office supplies on-hand as of September 30 are $50. Wage calculation data: Rate Pay 120 12 480 Month 31 Jul. 15 Aug. 31 Aug. 15 Sep. 30 Sep. Hours 10 40 35 38 40 420 1 2 480 Peyton Approved Trial Balance 2018 Unadjusted trial balance Debit | Credit 32,236.75 18,500.00 Debit Credit 1,500.00 2,400.00 6,000.00 Adjusted trial balance Debit Credit 32,236.75 18,500.00 175.63 1,500.00 2,400.00 6,000.00 250.00 600.00 7,700.00 10,000.00 250.00 600.00 7,700.00 10,000.00 5,000.00 480.00 16,000.00 5,000.00 480.00 16,000.00 Account Cash Baking Supplies Merchandise Inventory (FIFO) Prepaid Rent Prepaid Insurance Baking Equipment Accumulated Depreciation Office Supplies Accounts Receivable Notes Payable Interest Payable Accounts Payable Wages Payable Common Stock Dividends Bakery Sales Merchandise Sales Baking Supplies Expense Rent Expense Interest Expense Insurance Expense Depreciation Expense Misc. Expense Office Supplies Expense Business License Expense Advertising Expense Wages Expense Telephone Expense COGS (FIFO) 10,000.00 10.000.00 55,000.00 221.00 55,000.00 221.00 4.500.00 4.500.00 250.00 - 250.00 250.00 250.00 T L 375.00 200.00 1,956.00 150.00 157.62 375.00 200.00 1,956.00 150.00 157.62 L T L Total: (FIFO) 86,701.00 86,701.00 250.00 250.00 8 6,951.00 86,951.00 Peyton Approved Adjusting Journal Entries 2018 Credit Date Accounts 30-Sep Depreciation Expense I accumulated depreciation Debit 250 250.00 150.00 30-Sep Interest Expense Interest Payable 150.00 400.00 30-Sep Insurance Expense Prepaid Insurance 400.00 17,400.00 30-Sep Baking Supplies Expense Baking Supplies 17,400.00 550.00 30-Sep Miscellaneous Expense Miscellaneous Supplies 550.00 18,750.00 18,750.00 date date date Cash 10,000.00 10,000.00 Notes Payable 10,000 date 3-Jul 10 Jul Business License exp 375.00 1.Jul 3-Jul Common Stock 10,000 1.Jul 6,000 13-Jul 16,000.00 16,000.00 Balance 10,000.00 10,000.00 Balance Balance 375.00 375.00 3,000.00 375.00 250.00 200.00 300.00 2,400.00 7-Jul 10 Jul 11.Jul 13-Jul 14-Jul 31.Jul 31-Jul 10,000.00 120.00 5-Aug 8-Aug 3,800.00 75.00 10-Aug 18 Aug 3,000.00 Insurance expense 1,500.00 8,500.00 480.00 300.00 15-Aug 20-Aug 20 Aug 22-Aug 31-Jul 8-Aug 18-Aug 31-Aug Accounts Rec. 5,000.00 3,800.00 3,000.00 7,500.00 4,000.00 6,000.00 12,500.00 31-Aug 10,000.00 420.00 60.00 1.Sep 5-Sep 7-Sep 8-Sep 30-Sep 8-Sep 4,000.00 10,800.00 75.00 5,000.00 1,500.00 10-Sep 13-Sep 15-Sep 18,500.00 7,700.00 Balance 15-Sep 68.00 456.00 20-Sep 122.00 20-Sep 24-Sep 153.00 151.25 30-Sep 30-Sep 14,000.00 35,284.25 67,521.00 32,236.75 Balance Misc. expense 250.00 Baking equipment 6,000 Advertising expense 200.00 11-Jul 13-Jul 13-Jul 250.00 250.00 6,000.00 6,000.00 200.00 200.00 Balance Balance Balance 1.Jul 15-Aug 11-Sep Baking supplies 6,500 5,000 7,000 14-Jul 22-Aug Office supplies 300 300 7-Jul 15-Aug 15-Sep Rent expense 1,500 1,500 1,500 18,500.00 18,500.00 600.00 600.00 4,500.00 4,500.00 Balance Balance Balance Prepaid rent 1,500 7-Jul 31-Jul Prepaid insurance 2,400 Bakery Sales 15,000 20,000 20,000 55,000.00 55,000.00 31-Jul 31 Aug 30-Sep 1,500.00 1,500.00 2,400.00 2,400.00 Balance Balance Balance 31-Jul 1.Jul 30-Jul Wages expense 120 480 420 5-Aug 10-Aug 31-Jul 15-Aug 31-Aug 15-Sep 30-Sep 15-Aug 15-Aug 456 20-Aug Accounts payable | 6,500.00 75 75 5,000 8,500 75 75 7,000.00 5.000 20-Aug Wages payable 120 120 480 480 420 420 456.00 456 480.00 480 31-Aug 31-Aug 5-Sep 10-Sep 15-Sep 11-Sep 20-Sep 13-Sep 30-Sep 13,650 1,476 18,650 5,000 Balance 1,956 1,956 1,956 480 Balance Balance depreciation expense Dividends 10,000 1-Sep 30-Jul 31-Aug Telephone expense 75 75 a dep 10,000 10,000 Balance 150 Interest expense Balance 150 baking supplies expense Interest pavable 15-Sep 24-Sep COGS FIFO 48.00 109.62 misc supplies expense - 157.62 157.62 Balance Merchandise Sales 68.00 153.00 15-Sep 24-Sep 7-Sep 15-Sep 20-Sep Merch. Inv. FIFO 60.00 48.00 122.00 109.62 151.25 333.25 157.62 175.63 24-Sep 221 221 Balance 30-Sep Balance II. 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. On September 30, the following adjustments must be made: (Note: This is a sample.) Depreciation of baking equipment transferred to company on 7/13. Assume a half month of depreciation in July using the straight-line method. Accrue interest for note payable. Assume a full month of interest for July. (6% annual interest on $10,000 loan from parents.) Record insurance used for the year. Actual baking supplies on-hand as of September 30 are $1,100. Office supplies on-hand as of September 30 are $50. Wage calculation data: Rate Pay 120 12 480 Month 31 Jul. 15 Aug. 31 Aug. 15 Sep. 30 Sep. Hours 10 40 35 38 40 420 1 2 480 Peyton Approved Trial Balance 2018 Unadjusted trial balance Debit | Credit 32,236.75 18,500.00 Debit Credit 1,500.00 2,400.00 6,000.00 Adjusted trial balance Debit Credit 32,236.75 18,500.00 175.63 1,500.00 2,400.00 6,000.00 250.00 600.00 7,700.00 10,000.00 250.00 600.00 7,700.00 10,000.00 5,000.00 480.00 16,000.00 5,000.00 480.00 16,000.00 Account Cash Baking Supplies Merchandise Inventory (FIFO) Prepaid Rent Prepaid Insurance Baking Equipment Accumulated Depreciation Office Supplies Accounts Receivable Notes Payable Interest Payable Accounts Payable Wages Payable Common Stock Dividends Bakery Sales Merchandise Sales Baking Supplies Expense Rent Expense Interest Expense Insurance Expense Depreciation Expense Misc. Expense Office Supplies Expense Business License Expense Advertising Expense Wages Expense Telephone Expense COGS (FIFO) 10,000.00 10.000.00 55,000.00 221.00 55,000.00 221.00 4.500.00 4.500.00 250.00 - 250.00 250.00 250.00 T L 375.00 200.00 1,956.00 150.00 157.62 375.00 200.00 1,956.00 150.00 157.62 L T L Total: (FIFO) 86,701.00 86,701.00 250.00 250.00 8 6,951.00 86,951.00 Peyton Approved Adjusting Journal Entries 2018 Credit Date Accounts 30-Sep Depreciation Expense I accumulated depreciation Debit 250 250.00 150.00 30-Sep Interest Expense Interest Payable 150.00 400.00 30-Sep Insurance Expense Prepaid Insurance 400.00 17,400.00 30-Sep Baking Supplies Expense Baking Supplies 17,400.00 550.00 30-Sep Miscellaneous Expense Miscellaneous Supplies 550.00 18,750.00 18,750.00 date date date Cash 10,000.00 10,000.00 Notes Payable 10,000 date 3-Jul 10 Jul Business License exp 375.00 1.Jul 3-Jul Common Stock 10,000 1.Jul 6,000 13-Jul 16,000.00 16,000.00 Balance 10,000.00 10,000.00 Balance Balance 375.00 375.00 3,000.00 375.00 250.00 200.00 300.00 2,400.00 7-Jul 10 Jul 11.Jul 13-Jul 14-Jul 31.Jul 31-Jul 10,000.00 120.00 5-Aug 8-Aug 3,800.00 75.00 10-Aug 18 Aug 3,000.00 Insurance expense 1,500.00 8,500.00 480.00 300.00 15-Aug 20-Aug 20 Aug 22-Aug 31-Jul 8-Aug 18-Aug 31-Aug Accounts Rec. 5,000.00 3,800.00 3,000.00 7,500.00 4,000.00 6,000.00 12,500.00 31-Aug 10,000.00 420.00 60.00 1.Sep 5-Sep 7-Sep 8-Sep 30-Sep 8-Sep 4,000.00 10,800.00 75.00 5,000.00 1,500.00 10-Sep 13-Sep 15-Sep 18,500.00 7,700.00 Balance 15-Sep 68.00 456.00 20-Sep 122.00 20-Sep 24-Sep 153.00 151.25 30-Sep 30-Sep 14,000.00 35,284.25 67,521.00 32,236.75 Balance Misc. expense 250.00 Baking equipment 6,000 Advertising expense 200.00 11-Jul 13-Jul 13-Jul 250.00 250.00 6,000.00 6,000.00 200.00 200.00 Balance Balance Balance 1.Jul 15-Aug 11-Sep Baking supplies 6,500 5,000 7,000 14-Jul 22-Aug Office supplies 300 300 7-Jul 15-Aug 15-Sep Rent expense 1,500 1,500 1,500 18,500.00 18,500.00 600.00 600.00 4,500.00 4,500.00 Balance Balance Balance Prepaid rent 1,500 7-Jul 31-Jul Prepaid insurance 2,400 Bakery Sales 15,000 20,000 20,000 55,000.00 55,000.00 31-Jul 31 Aug 30-Sep 1,500.00 1,500.00 2,400.00 2,400.00 Balance Balance Balance 31-Jul 1.Jul 30-Jul Wages expense 120 480 420 5-Aug 10-Aug 31-Jul 15-Aug 31-Aug 15-Sep 30-Sep 15-Aug 15-Aug 456 20-Aug Accounts payable | 6,500.00 75 75 5,000 8,500 75 75 7,000.00 5.000 20-Aug Wages payable 120 120 480 480 420 420 456.00 456 480.00 480 31-Aug 31-Aug 5-Sep 10-Sep 15-Sep 11-Sep 20-Sep 13-Sep 30-Sep 13,650 1,476 18,650 5,000 Balance 1,956 1,956 1,956 480 Balance Balance depreciation expense Dividends 10,000 1-Sep 30-Jul 31-Aug Telephone expense 75 75 a dep 10,000 10,000 Balance 150 Interest expense Balance 150 baking supplies expense Interest pavable 15-Sep 24-Sep COGS FIFO 48.00 109.62 misc supplies expense - 157.62 157.62 Balance Merchandise Sales 68.00 153.00 15-Sep 24-Sep 7-Sep 15-Sep 20-Sep Merch. Inv. FIFO 60.00 48.00 122.00 109.62 151.25 333.25 157.62 175.63 24-Sep 221 221 Balance 30-Sep Balance
