Using the Unadjusted Trial Balance, complete the following:a) Prepare the necessary adjusting entries as of December 31b) Post the entries and prepare an ADJUSTED Trial Balance

c) Prepare a Multi-Step Income Statement (Note: The only administrative expenses are office salaries and insurance. The building depreciation is on the store building.) using common-size percents.

d) Prepare the closing entries BAYER LAMP COMPANYUnadjusted Trial BalanceFor Year Ended December 31AccountDebitCreditCash227,800 Accounts receivable193,200 Merchandise Inventory225,000 Prepaid Insurance11,600 Land240,000 Building440,000 Accum. Depreciation Building 132,000Store Fixtures222,400 Accum. Depreciation Store Fixtures 44,480Accounts Payable 151,600Salary Payable 0Common Stock 400,000Retained Earnings 480,720Dividends1,000 Sales 2,206,000Sales Discounts14,800 Sales Returns and Allowances8,000 Interest Revenue 1,600Cost of Goods Sold1,206,200 Advertising Expense48,000 Sales Salaries Expense256,000 Office Salaries Expense296,000 Delivery Expense18,400 Depreciation Expense Store Building Depreciation Expense Store Fixture Insurance Expense Interest Expense8,000 TOTALS3,416,4003,416,400 Additional Information (for adjusting journal entries):a) Depreciation expense on the store building is $8,800.b) Depreciation expense on the store fixtures is $22,240.c) Accrued sales salaries are $5,600.d) Insurance expired during the year is $10,000.e) Cost of merchandise inventory on hand December 31 is $222,000. Prepare Adjusting entries: DateAccount TitleDebitCredit

NOTE: Remember to POST the adjusting entries above before preparing your adjusted trial balance

BAYER LAMP COMPANY ADJUSTED Trial Balance For Year Ended December 31AccountDebitCreditCash227,800 Accounts Receivable193,200 Merchandise Inventory Prepaid Insurance Land240,000 Store Building440,000 Accummulated Depreciation Store Building Store Fixtures222,400 Accummulated Depreciation Store Fixtures Accounts Payable 151,600Salary Payable Common Stock 400,000Retained Earnings 480,720Dividends1,000 Sales 2,206,000Sales Discounts14,800 Sales Returns and Allowances8,000 Interest Revenue 1,600Cost of Goods Sold Advertising Expense48,000 Sales Salaries Expense Office Salaries Expense296,000 Delivery Expense18,400 Depreciation Expense Store Building Depreciation Expense Store Fixture Insurance Expense Interest Expense8,000 TOTALS$1,717,600$3,239,920

Merchandise Inventory

Prepaid
Insurance

Accum. Deprec - Building

Unadj.225,000 Unadj.11,600 132,000Unadj. Adj. Adj. Adj.

Accum. Deprec - Fixtures

Salaries Payable Cost of Goods Sold 44,480Unadj. 0Unadj.Unadj.1,206,200 Adj. Adj.Adj.

Sales Salaries Expense

Deprec. Exp - Buildings Unadj.256,000 Unadj.0 Adj. Adj.

Deprec. Exp - Fixtures

Insurance ExpenseUnadj.0 Unadj.0 Adj. Adj. BAYER LAMPMulti-step Income StatementFor Year Ending December 31Sales Less: Sales Discounts Sales Returns & Allowance Net Sales Cost of Goods Sold Gross Profit Operating Expenses Selling Expenses: Advertising Expense Sales Salaries Expense Delivery Expense Depreciation Expense - Building Depreciation Expense - Store Equipment Total Selling Expenses General and Admin Expenses: Office Salaries Expense Insurance Expense Total General and Administration Expenses Total Expenses Income from Operations Other Revenues/Expenses: Interest Revenue Interest Expense Total Other Revenue (Expense) Net Income

What does common-size percent mean? Analyze the income statement using the common-size percents.

Closing Entries Step 1: Close Revenue accounts with normal credit balancesDEBITCREDIT Step 2: Close Contra-Revenue accounts and Expenses Step 3: Close Income Summary by adding to Retained Earnings Step 4: Close Dividends by removing from Retained Earnings