TRIAL BALANCE SHEET:

Dec 31 Depreciation Expense

Accumulated Depreciation

Dec 31 Amortization Expense

Accumulated Amortization

Dec 31 Interest Expense

Interest Payable

Dec 31 Insurance Expense

Prepaid Insurance

Dec 31 Baking Cost of Goods Sold 27,850

Baking Supplies 27,850

Dec 31 Office Supplies Expense 250

Office Supplies 250

Dec 31 Wages Expense

Wages Payable

TOTALS:

NEEDED ADJUSING INFORMATION:

THIS IS ALL THE CASE INFORMATION THAT WE WERE GIVEN!!!!

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, 3rd year of use of 7 total ($642.86 per year)

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

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

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

o Trademark for company name: Initial cost, $2,300, 3rd 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 7.5% annual rate, interest only until due date.

Insurance: Annual policy covers 12 months, purchased in February, covering March 2017 February 2018. No monthly adjustments have been made.

Other information: An employee slipped and fell in the baking area and has filed a lawsuit. The company lawyer indicates that it is probable that the company will be found liable. No additional information is available.