Question

I NEED HELP WITH STEPS 5,6,7 and the T-Accounts !

Incorporate the feedback that you received from your Milestone One submission on Steps 1–4. A. Step One: Complete the “July Journal Entries” tab in your workbook using the Step One data in the appendix. B. Step Two: Complete the “August Journal Entries” tab in your workbook using the Step Two data in the appendix. C. Step Three: Complete the “September Journal Entries” tab in your workbook using the Step Three data and updated scenario information in the appendix. Note that there was an additional line of products added this month, so you must first complete the “Inventory Valuation” tab in your workbook and copy the journal entries from the inventory evaluation page into your journal for this month to ensure the impact of merchandising is reflected in your reporting. D. Step Four: Transfer posted entries to T accounts. II. Apply the accrual basis of accounting to correctly create adjusting entries in the preparation of financial statements: A. Step Five: Prepare the unadjusted trial balance. Note that you should use the T account balances completed in the previous step to prepare the unadjusted trial balance portion of the “Trial Balance” tab in your workbook. B. Step Six: Complete the “Adjusting Entries” tab in your workbook using the Step Six data in the appendix. Note that you should take the adjusting entries from this worksheet and enter them into the “Trial Balance” tab in your workbook. C. Step Seven: Apply adjusting entries to create the adjusted trial balance. Note that the adjusting entries from Step Six will apply to affected accounts in the unadjusted trial balance to arrive at the adjusted trial balance.

On September 30, the following adjustments must be made:

 [Note: This is a sample.] Depreciation of baking equipment transferred to company on 7/13. Assume a half month of depreciation in July using the straight-line method.  Accrue interest for note payable. Assume a full month of interest for July. (6% annual interest on $10,000 loan from parents.)  Record insurance used for the year.  Actual baking supplies on-hand as of September 30 are $1,100.  Office supplies on-hand as of September 30 are $50.

Wage calculation data:

Month Hours Rate Pay 31 Jul. 10 12 120 15 Aug. 40 12 480 31 Aug. 35 12 420 15 Sep. 38 12 456 30 Sep. 40 12 480

Date   Accounts   Debit   Credit
1-Jul   Cash   10,000.00   
   Common Stock       10,000.00
          
1-Jul   Baking Supplies Expense   6,500.00   
   Accounts Payable       6,500.00
          
3-Jul   Cash    10,000.00   
   Notes Payable       10,000.00
          
7-Jul   Rent Expense   1,500.00   
   Prepaid Rent   1,500.00   
   Cash       3,000.00
          
10-Jul   Business Lincense Expense   375.00   
   Cash       375.00
          
11-Jul   Miscellaneous Expense   250.00   
   Cash       250.00
          
13-Jul   Baking Equipment   6,000.00   
   Common Stock       6,000.00
          
13-Jul   Advertising Expense   200.00   
   Cash       200.00
          
14-Jul   Office Supplies   300.00   
   Cash       300.00
          
30-Jul   Telephone Expense   75.00   
   Accounts Payable       75.00
          
31-Jul   Prepaid Insurance   2,400.00   
   Cash       2,400.00
          
31-Jul   Wages Expense   NA   
   Wages Payable       NA
          
31-Jul   Cash   10,000.00   
   Accounts Receivable   5,000.00   
   Bakery Sales       15,000.00

   Total   54,100.00    54,100.00

Date   Accounts   Debit   Credit
5-Aug   Wages Payable   120.00   
   Cash       120.00
          
8-Aug   Cash   3,800.00   
   Accounts Receivable       3,800.00
          
10-Aug   Telephone Expense   NA   
   Cash       NA
          
15-Aug   Baking Supplies   5,000.00   
   Accounts Payable       5,000.00
          
15-Aug   Wages Expense   NA   
   Wages Payable       NA
          
15-Aug   Rent Expense   1,500.00   
   Cash       1,500.00
          
18-Aug   Cash   3,000.00   
   Accounts Receivable       3,000.00
          
20-Aug   Accounts Payable   8,500.00   
   Cash       8,500.00
          
20-Aug   Wages Payable   480.00   
   Cash       480.00
          
22-Aug   Office Supplies   300.00   
   Cash       300.00
          
31-Aug   Telephone Expense   75.00   
   Accounts Payable       75.00
          
31-Aug   Wages Expense   NA   
   Wages Payable       NA
          
31-Aug   Accounts Receivable   7,500.00   
   Cash   12,500.00   
   Sales       20,000.00
          
   Total   42,775.00    $ 42,775.00

Date   Accounts   Debit   Credit
1-Sep   Dividends   10,000.00   
   Cash       10,000.00
          
5-Sep   Wages Payable   420.00   
   Cash       420.00
          
7-Sep   Merchandise Inventory   60.00   
   Cash       60.00
          
8-Sep   Cash   4,000.00   
   Account Receivable       4,000.00
          
10-Sep   Accounts Payable   75.00   
   Cash       75.00
          
11-Sep   Baking Supplies   7,000.00   
   Accounts Payable       7,000.00
          
13-Sep   Accounts Payable   5,000.00   
   Cash       5,000.00
          
15-Sep   Wages Expense   NA   
   Wages Payable       Na
          
15-Sep   Rent Expense   1,500.00   
   Cash       1,500.00
          
15-Sep   Cash   68.00   
   Merchandise Sales       68.00
          
15-Sep   Cost of Goods Sold   48.00   
   Merchandise Inventory       48.00
          
20-Sep   Wages Payable    456.00   
   Cash       456.00
          
20-Sep   Merchandise Inventory   122.00   
   Cash       122.00
          
24-Sep   Cash   153.00   
   Merchandise Sales       153.00
          
24-Sep   Cost of Goods sold   109.60   
   Merchandise Inventory       109.60
          
30-Sep   Merchandise Inventory   151.25   
   Cash       151.25
          
30-Sep   Wages Expense   480.00   
   Wages Payable       480.00
          
30-Sep   Accounts Receivable   6,000.00   
   Cash   14,000.00   
   Bakery Sales       20,000.00
   Total   49,642.85    49,642.85

Answer 1

Step Five : Un adjusted Trial Balance :

Particulars	Debit	Credit
Cash	32,331.75	-
Capital	-	16,000.00
Baking Supplies Inventory	18,500.00	-
Accounts Payables	-	5,575.00
Loan	-	10,000.00
Rent	4,500.00	-
Prepaid Ren	1,500.00	-
License Expense	375.00	-
Office Supplies	600.00	-
Misc Expense	250.00	-
Advertising Expense	200.00	-
Telephone Expenses	150.00	-
Prepaid Insurance	2,400.00	-
Accounts Recievables	7,700.00	-
Sales	-	55,221.00
Wages Payable	1,956.00	-
Dividend	10,000.00	-
Cost of Goods Sold	157.60
Machine	6,000.00
Merchandise Inventory	175.65	-

Total

86,796.00

86,796.00

Step Six : Adjusting Entries

Particulars	Debit	Credit
Interest Payable….Dr	150
to Interest Expense		150
Cost of Goods sold…Dr	17,400
To Baking Supplies Inventory		17,400
Insurance Expense…Dr	600
To Prepaid Insurance		600
Wages …..Dr	1,956
To Wages Payable		1,956
Depreciation Expense…..Dr	125
To Depreciation on Baking Equipment		125
Office Supplies Inventroy..Dr	50
To Office Supplies Expense		50

Adjusted Trial Balance :

Particulars	Debit	Credit
Cash	32,331.75
Capital		16,000.00
Baking Supplies Inventory	1,100.00
Accounts Payables		5,575.00
Loan		10,000.00
Rent	4,500.00
Prepaid Ren	1,500.00
License Expense	375.00
Office Supplies Expense	550.00
Misc Expense	250.00
Advertising Expense	200.00
Telephone Expenses	150.00
Prepaid Insurance	1,800.00
Accounts Recievables	7,700.00
Sales		55,221.00
Wages Payable	-
Dividend	10,000.00
Cost of Goods Sold	17,557.60
Machine	6,000.00
Merchandise Inventory	175.65
Interest Expense	150.00
Interest Payable	-	150.00
Insurance Expense	600.00
Wages	1,956.00
Depreciation Expense	125.00
Office Supplies Inventory	50.00
Depreciation on Baking equipment		125.00
Total	87,071.00	87,071.00

Note : In absence of information pertaining to rate of depreciation, same is been calculated at 10% P.A SLM basis.