Natalie reviews the updated trial balance prepared in Chapter 3. She recalls from her introductory accounting class that there are some adjustments that need to be prepared. She gathers up as much information as she can to enable the following adjusting journal entries to be prepared on June 30, Koebel's Family Bakery's year end:

1. A count reveals that $600 worth of advertising brochures, recorded in the Supplies account, have been distributed during the month of June.

2. Depreciation is to be recorded on the building for the year. The building was purchased 26 years ago and has an estimated useful life of 30 years.

3. Depreciation is to be recorded on the equipment for the year. The equipment was purchased three years ago at a cost of $42,000 and has an estimated useful life of six years. Recall as well that there was new baking equipment purchased on June 16 at a cost of $2,520. One month's depreciation is to be recorded on this equipment; its useful life is six years.

4. Depreciation is to be recorded on the delivery truck, recorded in the Vehicles account. The delivery truck was purchased on January 1 at a cost of $52,500 and has an estimated useful life of five years.

5. Interest on the bank loan and mortgage payable was last paid on June 25. Interest accrued on the five days remaining in June is $55.

6. One month's worth of the 12-month property insurance policy purchased for $15,360 on June 2 has expired.

7. Six months' worth of the prepaid vehicle insurance has also expired. Recall that this insurance was purchased on January 1 for an annual cost of $12,000.

8. At the end of June, heat and electricity on the building, $1,025, was owed. Amounts are to be paid by July 15.

9. During the last week of June an unexpected order was received from Biscuits to prepare 750 dozen oatmeal chocolate chip cookies. The order was filled and an invoice was prepared, $1,600. This invoice was not included in the accounting records at June 30.

10. Salaries for employees were paid on June 30. There were two part-time employees working in the bake shop on June 30 who forgot to submit their timesheets for that day. They both worked an eight-hour shift and were paid $13 an hour.

Instructions

(a) Prepare T accounts and enter the unadjusted June 30 trial balance amounts from BYP 3-7 in Chapter 3.

(b) Prepare the adjusting journal entries required at June 30.

(c) Post the adjusting journal entries to the T accounts.

(d) Prepare an adjusted trial balance at June 30, 2014.