create adjusting entries for transactions 1-10. Then create an Adjusted Trial Balance, Income statement, Statement of Stockholders' Equity, and a Balance sheet

INSTRUCTIONS: Malcolm's Cycles ("Malcolm's") sells bicycles for any type of adventure - mountain, road, etc. Malcolm started the business in 2018 and has had seen initial success. In 2019, Malcolm was very busy with and did not keep up with the accounting records until the end of the end. Malcolm asked his friend, a Bentley student, to help him update the accounting records for the year ended December 2019. Malcolm has an unadjusted trial balance (see "Unadjusted Trial Balance" tab) with information. The Bentley student found that Malcolm still needed to record 10 adjusting journal entries in order to close the year. (See the "Regular and AJE Info" tab.) Malcolm needs help from the Bentley student as follows: 1. Prepare the 10 adjusting journal entries (using proper debits and credits and good form), showing them on the "AJE's" tab within this file. Show all calculations in Excel (on side or in formulas) to receive partial credit. 2. Update the balances from the Unadjusted Trial Balance to reflect the journal entries recorded in #1 above, resulting in an Adjusted Trial Balance in good form. Show all calculations in Excel (on side or in formulas) to receive partial credit. SEE Page 407; Exhibit 12.5 in the texbook for an example. 3. Prepare the following financial statements in proper form in this Excel spreadsheet file. Show all calculations in Excel (on side or in formulas) to receive partial credit. a. Income Statement b. Statement of Changes in Stockholders' Equity c. Balance Sheet Malcolm's Cycles Unadjusted Trial Balance For the year ended 12/31/19 Una djusted Trial Balance Debit Credit $ 1,200,000 400,000 30,000 375,000 25,000 90,000 1,100,000 200,000 170,000 Cash Accounts receivable Allowance for doubtful accounts Interest receivable Inventory Prepaid advertising Prepaid rent Store equipment -cost Accumulated depreciation - store equipment Accounts payable Salary payable Interest payable Income tax payable Travel payable Unearned revenue Notes payable - Due April 1, 2020 Notes payable - Due April 1, 2022 Common stock Retained earnings - beginning of year Sales revenue Sales returns and allowances Cost of goods sold Advertising expense Bad debt expense Depreciation expense Travel expense Income tax expense Interest expense Interest income Rent expense Salaries expense Utilities expense Total 145,000 500,000 700,000 100,000 475,000 2,200,000 100,000 800,000 125,000 10,000 40,000 35,000 1,000 80,000 135,000 6,000 $ 4,521,000 $ 4,521,000 check Malcolm's Cycles ADJUSTING JOURNAL ENTRIES: NOTE: Assume that all prior regular journal entries were recorded correctly prior to December unless otherwise noted. Only the below AJE's discovered by the Bentley students in December still need to be recorded. Show all calculations in Excel (on side or in formulas) to receive partial credit. If no transaction exists, write "NO TRANSACTION" for the journal entry Transaction 1 Transaction 1 Malcolm sold $40,000 of gift cards during 2019 that were recorded. He did not record the use of them during the year. At December 31, 2019, Malcolm realized that there were $10,000 worth of gift cards outstanding. Transaction 2 Transaction 2 Malcolm entered into an advertising contract and prepaid $25,000 on October 1, 2019. The contract was for 5 month's usage. Malcolm did not incur the expense through December 2019. Transaction 3 prospective employee sign an offer letter to start working in the sales department Transaction 3 In December 2019, Malcolm had in January 2020. Transaction 4 Transaction 4 Malcolm didn't update its bad debt estimate. Malcolm uses the Credit sales method for estimating its bad debt expense and estimates 2% of their unadjusted trial balance net sales is estimated to be uncollectible. Transaction 5 Transaction 5 Malcolm received a loan on April 1, 2019 from the bank but did not record interest on any of the loan balances listed on the unadjusted trial balance. Interest rate is 6% and is not payable until the loans are due. Transaction 6 Transaction 6 Malcolm sold $20,000 of bicycles to a team for the Pan Mass Challenge (PMC) in December 2019 for $20,000. The team received the bicycles and invoice in December that requested to pay Malcolm in January 2020. Transaction 7 Transaction 7 Malcolm did not record his remaining payroll for December. He pays employees weekly on Friday for a five day work week. Weekly payroll is $25,000. Malcolm notices that December 31st is on a Tuesday. Transaction 8 Transaction 8 A customer came in on April 1, 2019 to purchase an off-road bicycle. He took the bike to the register and realized that he didn't have his wallet. Malcolm put the bicycle aside for the customer, who would come back shortly. However, as of December 31, 2019, the customer has not returned. Transaction 9 Diego estimates the income tax expense for 2019 to be $150,000 and had not recorded this yet. Transaction 9 Transaction 10 Malcolm attended a bicycle trade show but did not submit his travel expenses in December 2019 of $5,000. Transaction 10