Scenario for adjusting entries: Year end is December $31,2017.$ Peyton Baking Company uses the

following accounting practices:

$$ Inventory: Periodic, FIFO for both baking and merchandise

o Baking supplies: $$27,850$ ending inventory

$$ Equipment: Straight line method used for equipment

o Mixing machine: $$5,000$ initial cost, $$500$ salvage value, $3$rd year of use of $7$ total

$($$$642\mathrm{.}86$ per year$)$

o Ovens: $$8,000$ initial cost, $$1,000$ salvage value, $3$rd year of use of $7$ total $($$$1,000$ per

year$)$

o Other depreciable equipment: $$4,000$ initial cost, $$0$ salvage value, $1$st year of use of $4$

total $($$$1,000$ per year$)$

o Bakery Leasehold Improvements: $$10,000,2$nd year of use $($$$2,000$ per year$)$

o Trademark for company name: Initial cost, $$2,300,3$rd year of use

$$ Office supplies: Periodic, FIFO. Ending balance is $$250.$

$$ Pay period is every $2$ weeks. Last pay period ended December $27.$

o $60$ employees with a daily pay of $$5,700.$ All receive pay through December $31.$

$$ Financing:

o $6\%$ interest note payable was made on January $31,2017,$ and is due February $1,2019.$

o $5-$year loan was made on June $1,2017.$ Terms are $7\mathrm{.}5\%$ annual rate, interest only until

due date.

$$ Insurance: Annual policy covers $12$ months, purchased in February, covering March $2017$

February $2018.$ No