You are the new staff accountant for salem bread company. salem is a wholesale bread distribution company which buys and distributes gourmet artisan breads to fine restaurants and other upscale establishments. You were hired on january 1, 2016 and are responsible for all phases of the accounting cycle. salem uses the perpetual method of accounting for inventory and a manual accounting system. Upon review of Salem's accounting manual, you find the following list of monthly procedures:

1) Post opening trial balance to T-Accounts

2) Analyze and prepare journal entries for transactions

3) Prepare an unadjusted trial balance

4) Analyze and prepare journal entries for January 2016 adjustments

5) Post the adjusting journal entries to the T-accounts

6) Prepare an adjusted trial balance

7) Prepare an unclassified balance sheet and a single step income statement

8) Prepare and journalize closing entries

9) Post the closing entries to the T-accounts

10) Prepare a post-closing trial balance

11) Prepare and journalize reversing entries

Being a new and conscientious staff accountant at Salem, you decided to use Salem's procedure list above and complete steps 1 through 11 for the month of January 31, 2016 using the following information.

Salem's post-closing trial balance as of December 31, 2015, appears below.

Account Title Debits Credits

Cash..............................................$32,000

Accounts receivable.......................85,000

Supplies ........................................ 6,300

Inventory ........................................80,000

Equipment .....................................225,000

Accumulated depreciation - equipment ... $77,000

Accounts payable ................................ 43,000

Deferred revenue ................................ 53,000

Common stock................................... 100,000

Retained earnings .............................. 155,300

Totals $428,300 $428,300

During January 2016, Salem processed the following transactions:

Jan 1 Issued common stock in exchange for $300,000 cash

2 Purchased inventory on account for $180,000

4 Paid the company's landlord $12,000 for rent for the upcoming year

10 Sold merchandise on account for $120,000. The cost of the merchandise was $75,000

12 Purchased $2,000 in supplies on account

15 Borrowed $50,000 from a local bank and signed a note. Principal and interest at 10% is to be repaid in one year

20 Paid employees $15,000 salaries and wages for the first half of the month

24 Paid $50,000 to suppliers for the merchandise purchased on January 2

26 Collected $60,000 on account from customers

28 Paid various utility bills of $1,500 for the month of Jule

31 Paid $8,000 in insurance for the period January 1, 2016 to December 31, 2016

The controller at Salem (Sam) provided you with the following information to adjust the financial records prior to the preparation of Salem's financial statements as of January 31, 2016.

1) The equipment is being depreciated on a straight-line basis with a useful life of 10 years and an estimated salvage value of $25,000.

2) $4,000 of supplies remained on hand at January 31, 2016

3) Accrued interest payable has not been recorded as of January 31, 2016

4) As of January 31, 2016, Salem owed its employees for 1/2 of January salaries.

5) As of January 31, 2016, deferred revenue of $32,000 was still unearned

6) Salem estimates that $10,000 of accounts receivable will not be collected.

7) During the bank reconciliation process, Sam noted that interest earned was $148 and a bank service charge of $35 was incurred.

8) On the January 31, 2016 bank statement a customer's check of $1,500 was returned unpaid.

9) On January 31, 2016, bread was sold for $70,000 with a cost of $40,000 which had not been recorded in the company's records.

10) At the end of the month of January, Salem had not received the monthly utility bill. Based on past experience the bill would be approximately $2,350 for January.