Step8: Many customers have been asking for more hypo-allergenic products, so in November you start carrying a line of hypo-allergenic shampoos on a trial basis. The following information relates to the purchase and sales of the shampoo: You use the perpetual inventory method. You are uncertain as to which valuation method to useFIFO, LIFO, or weighted average, so you calculate inventory using all three and then decide which one you would like to choose.

You will use the Inventory Valuation tab in your workbook to complete the following entries. See samples for November for FIFO, LIFO, and the Weighted Average (wt. avg).

Purchases

11/7: 10 bottles purchased at $6

11/20: 20 bottles purchased at $6.10

12/1: 25 bottles purchased at $6.05

12/14: 30 bottles purchased at $6.00

12/26: 20 bottles purchases at $6.08

Sales selling price, $8.50 a bottle

11/15: 8 bottles

11/30: 18 bottles

12/15: 22 bottles

12/24: 24 bottles

Peyton Approved
Adjusting Journal Entries
2014
Date	Accounts	Debit	Credit
31-Dec	Depreciation Expense	458.33
	accumulated depreciation		453.33

Step 9.

You will use the Adjusting Entries tab in your workbook to complete the following entries. See sample for Depreciation of Baking Equipment.

	On December 31, the following adjustments must be made:
	Depreciation of baking equipment transferred to company on 7/13. Assume month of depreciation in July using the straight-line method. (Cell B6)
	Accrue interest for note payable (Assume a full month of interest for July).
	Record insurance used for the year.
	An inventory of baking supplies shows $1,100 of supplies are remaining.
	An inventory of misc. supplies shows $50 remaining.

Peyton Approved
Trial Balance
2014
	Unadjusted trial balance		Adjusting entries		Adjusted trial balance
Account	Debit	Credit	Debit	Credit	Debit	Credit
Cash	87,692.15				87,692.15