The following is an alphabetical list of Bud?s Bakery?s adjusted account balances at the end of the company?s fiscal year on November 30, 2021:

Additional facts:

1. Bud?s Bakery uses a periodic inventory system.

2. Of the mortgage payable, $8,500 is due on March 31, 2022.

3. A physical count determined that merchandise inventory on hand at November 30, 2021, was $37,350.

4. The owner made no capital contributions during the year.

Instructions

a. Prepare a multiple-step income statement, statement of owner?s equity, and classified balance sheet for the November 30, 2021, year end.

b. Prepare the closing journal entries.

c. Post closing entries to the Merchandise Inventory and capital accounts. Check that the balances in these accounts are the same as the amounts on the balance sheet.

If you had not been told that Bud?s Bakery uses a periodic inventory system, how could you have determined that? What information is available in a periodic inventory system that is not available in a perpetual inventory system?

Transcribed Image Text:

Accounts payable $ 32,310 $ 34,360 Merchandise inventory Mortgage payable Prepaid insurance Property tax expense Purchases Accounts receivable 13,770 106,000 Accumulated depreciation-building Accumulated depreciation-equipment Building В. Наchey, capital B. Hachey, drawings 61,200 4,500 19,880 3,500 175,000 634,700 104,480 Purchase discounts 6,300 13,315 12,000 Purchase returns and allowances Cash 8,500 Rent revenue 2,800 Salaries expense Salaries payable Sales Depreciation expense Equipment Freight in Freight out Insurance expense Interest expense 14,000 122,000 57,000 8,500 5,060 872,000 8,200 Sales discounts 8,250 9,000 Sales returns and allowances 9,845 5,300 Unearned revenue 3,000 Land 85,000 Utilities expense 19,800