Question

Create financial statements by properly employing prescribed methods in accordance with generally accepted accounting principles:
A. Step Eight: Prepare the financial statements. Note that you must use your adjusted trial balance to prepare the income statement, statement of
owner’s equity, and balance sheet. You must complete these statements in this order, as there are interdependencies among them. [ACC-201-
03]
B. Step Nine: Complete the “Closing Entries” tab in your workbook by closing all temporary income statement amounts to create closing entries.
[ACC-201-03]
C. Step Ten: Prepare the “Post Closing Trial Balance” tab for the next accounting period. [ACC-201-03]
D. Step Eleven: Prepare the reversing entries in the “Reversing Entries” tab of your workbook. [ACC-201-03]

Adjusting entries Debit T Credit Peyton Approved Trial Balance 2018 Unadjusted trial balance Debit Credit 32,331.75 18,500.00 175.65 1,500.00 2.400.00 6,000.00 17,400.00 400.00 250.00 550.00 600.00 7,700.00 10,000.00 150.00 5,000.00 480.00 16,000.00 Account Cash Baking Supplies Merchandise Inventory (FIFO) Prepaid Rent Prepaid Insurance Baking Equipment Accumulated Depreciation Office Supplies Accounts Receivable Notes Payable Interest Payable Accounts Payable Wages Payable Common Stock Dividends Bakery Sales Merchandise Sales Baking Supplies Expense Rent Expense Interest Expense Insurance Expense Depreciation Expense Misc. Expense Office Supplies Expense Business License Expense Advertising Expense Wages Expense Telephone Expense COGS (FIFO) Adjusted trial balance Credit 32,331.75 1,100.00 175.65 1,500.00 2,000.00 6,000.00 250.00 50.00 7,700.00 10,000.00 150.00 5,000.00 480.00 16,000.00 10,000.00 55,000.00 221.00 17,400.00 4,500.00 150.00 400.00 250.00 250.00 550.00 375.00 200.00 1.956.00 150.00 157.60 10,000.00 55,000.00 221.00 17,400.00 4,500.00 150.00 400.00 250.00 250.00 550.00 375.00 200.00 1,956.00 150.00 157.60 Total: (FIFO) 86,796.00 86,701.00 18,750.00 18,750.00 87,196.00 87,101.00

Answer 1

Answer:

Peyton Approved INCOME STATEMENT 2018 Revenue: Bakery sales Merchandise sales 55,000.00 221.00 55,221.00 157.60 55,063.40 Less: Cost of goods sold Less: Expenses: Baking supplies expense Rent expense Interest expense Insurance expense Depreciation expense Misc. expense Office supplies expense Business license expense Advertising expense Wages expense Telephone expense Total expense Net Income 17,400.00 4,500.00 150.00 400.00 250.00 250.00 550.00 375.00 200.00 1,956.00 150.00 26,181.00 28,882.40

Peyton Approved STATEMENT OF RETAINED EARNINGS 2018 Retained earning at the beginning of the period Add: Net Income earned Total Income Less: Dividend Retained earning at the Ending of the period 0.00 28882.401 28882.40 10000.00 18882.40

Peyton Approved Statement of Owner's equity 2018 Common Stock Add: Retained earnings Owner's equity $ 16,000.00 $ 18,882.40 $34,882.40

Assets Current Assets: Cash Baking supplies Merchandise inventory Prepaid rent Prepaid insurance Account receivable Office supplies Peyton Approved BALANCE SHEET 2018 Liabilities & Stockholder's Equity Current Liabilities: 32,331.75 Note payable 10,000.00 1,100.00 Interest payable 150.00 175.65 Account payable 5,000.00 1,500.00 Wages payable 480.00 2,000.00 7,700.00 50.00 Total Current Assets 44,857.40 Total Current Liabilities 15,630.00 Non-current Assets: Baking equipment Less: Accumulated depreciation 6,000.00 250.00 Stockholder's Equity: Common stock 5,750.00 Retained earning Diff. in Trial Balance 50,607.40 Total Liabilities & Stockholder's Equity 16,000.00 18,882.40 34,882.40 95.00 50,607.40 Total Assets

Note: There is difference of $95.00 in adjusted trial balance as given in the question.