Sinfully Sweet Desserts Unadjusted Trial Balance December 31, 2025 Debit 105,800 14,600 Credit 1,900 10,000 1,200 4.200 Accounts Cash Accounts Receivable Allowance for Bad Debts Inventory Prepaid Advertising Supplies Accounts Payable Unearned Revenue Long-Term Note Payable Common Stock Retained Earnings Sales Revenue Cost of Goods Sold Wages Expense Utility Expense Advertising Expense 14,200 12,000 7,000 72.900 28.800 74,200 40,200 10,700 3,400 20,900 211,000 Totals 211,000 Adjusting Entries: December 31: In reviewing the bank statement, we find that during December, $1,100 in revenue was incorrectly debited to inventory instead of cash (the credit was correct). December 31: Determine that we earned (but haven't received) $7,300 in interest revenue on our savings account during the year. December 31: We earned $10,850 in sweets sales revenue during December 2025 that was paid for in advance by our customers. The cost of those sweets was $1,800. Prepare entries to record both the sale and cost of goods sold. Record both entries. December 31: Entire year's advertising ($1,200 per month) was paid in advance on January 1, 2025 (recorded in January) - one month of Prepaid Advertising remains to be recorded. December 31: Determined that $500 of supplies were used during the period. December 31: December utilities are $2,900. The bill will be paid in January 2026. Utilities Expense and a Utilities Payable should be recorded. December 31: The company has not recorded bad debt expense for 2025. Sinfully uses the Aging of Receivables approach and estimates that the ending balance in the Allowance for Bad Debts should be $7,000. December 31: The long term note payable was recorded on July 1, 2025. The interest and the note are due on July 31, 2030. The interest rate is 12%. Record the 2025 interest expense. December 31: Calculate Net Income Before Taxes and then record income taxes as 35% of this number (use the Multiple-Step Income Statement) - use this tax # to record the final adjusting entry for Income Tax Expense & Income Tax Payable AND as the Income Tax Expense figure in your Multiple-Step Income Statement. Note The taxes will be paid in March 2026. Adjusted Trial Balance Sinfully Sweet Desserts Adjusted Trial Balance December 31, 2025 Debit Credit Accounts Cash Accounts Receivable Allowance for Bad Debts Interest Receivable Inventory Prepaid Advertising Supplies Accounts Payable Utilities Payable Income Tax Payable Unearned Revenue Interest Payable Long-Term Note Payable Common Stock Retained Earnings Sales Revenue Interest Revenue Cost of Goods Sold Wages Expense Utilities Expense Advertising Expense Supplies Expense Bad Debt Expense Interest Expense Income Tax Expense Totals Statement of Retained Earnings Sinfully Sweet Desserts Statement of Retained Earnings For the Year Ended December 31, 2025 Retained Earnings, Jan. 1, 2025 Add: Net Income Less: Dividends Retained Earnings, Dec. 31, 2025