The Salem Bread Company produces and sells various bakery products to restaurants. The companys fiscal year-end is December 31.

Information necessary to prepare the year-end adjusting entries appears below.

1. Depreciation on the equipment for the year is $27,000.

2. Accrued wages at the end of the month are $5,000.

3. On April 1, 2016, Salem borrowed $40,000 from a local bank and signed a note. The note requires interest to be paid annually on March 31 at 6%. The principal is due in 5 years.

4. $1,000 of supplies remained on hand at December 31, 2016.

5. In November, a customer paid Salem $3,000 for an order that was delivered in December. The cash received was credited to Unearned Revenue. No other customer advances were received during the year.

6. On November 1, 2016, $4,500 rent was paid to the owner of the building. The payment represented rent for November 2016 February 2017.

Required:

Complete the partial worksheet provided in Excel by adjusting the accounts (indicating by number) and computing the adjusted trial balance.

Prepare and Income Statement, Statement of Retained Earnings and Balance Sheet in Excel.

Salem Bread Company
Work Sheet
FYE 12-31-16
	Unadj. Trial Balance			Adjusting Entries					Adjusted Trial Balance
Account Title	Debits		Credits		Debits		Credits		Debits		Credits
Cash	32000
Accounts receivable	85000
Inventory	75000
Prepaid rent	4500
Supplies	2300
Equipment	225000
Accumulated depreciation - equipment			77000
Accounts payable			28000
Wages payable
Note payable			40000
Interest payable			0
Unearned revenue			3000
Common stock			100000
Retained earnings			128800
Sales revenue			262000
Cost of goods sold	145000
Wage expense	52000
Rent expense	10000
Depreciation expense	0
Interest expense	0
Supplies expense	0
Miscellaneous expense	8000
Totals

	Salem Bread Company
	Income Statement
	FYE December 31, 2016
	Sales revenue
	Gross profit
	Operating expenses:
		Total Expenses
	Net income
	Salem Bread Company
	Statement of Retained Earnings
	FYE December 31, 2016
		Retained earnings, January 1
		Plus: Net income
		Retained earnings, December 31

Salem Bread Company

Balance Sheet

December 31, 2016

Assets:

Liabilities

Accounts payable

Cash

Note payable

Inventory

Prepaid rent

Total liabilities

Equipment

Stockholders' Equity

Less: Accum. Depr.

Common stock

Total SHE

Total assets

Total liabilities & Stkhldrs' Equity