I need help with section 2 and 3 for this assignment

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 Step Four to prepare the unadjusted trial balance portion of the Trial Balance tab in your workbook. [ACC-201-02] 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. [ACC-201-02] 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. [ACC-201-02] 3

III. 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 owners 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

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

Peyton Approved
Trial Balance
2018
	Unadjusted trial balance		Adjusting entries		Adjusted trial balance
Account	Debit	Credit	Debit	Credit	Debit	Credit
Cash	22,936.75				22,936.75
Baking Supplies	18,500.00			17,400.00	1,100.00
Merchandise Inventory (FIFO)	175.63				175.63
Prepaid Rent	1,500.00				1,500.00
Prepaid Insurance	2,400.00			400.00	2,000.00
Baking Equipment	6,000.00				6,000.00
Accumulated Depreciation				250.00		250.00
Office Supplies	600.00			550.00	50.00
Accounts Receivable	7,700.00				7,700.00
Notes Payable		10,000.00				10,000.00
Interest Payable						-
Accounts Payable		5,000.00				5,000.00
Wages Payable		480.00				480.00
Common Stock		16,000.00				16,000.00
Dividends	10,000.00				10,000.00
Bakery Sales		55,000.00				55,000.00
Merchandise Sales		221.00				221.00
Baking Supplies Expense			17,400.00		17,400.00
Rent Expense	4,500.00				4,500.00
Interest Expense			150.00		150.00
Insurance Expense			400.00		400.00
Depreciation Expense			250.00		250.00
Misc. Expense	250.00	250.00	400.00		400.00
Office Supplies Expense					-
Business License Expense	375.00				375.00
Advertising Expense	200.00				200.00
Wages Expense	2,016.00				2,016.00
Telephone Expense	150.00				150.00
COGS (FIFO)	157.62				157.62
Total: (FIFO)	77,461.00	86,951.00	18,600.00	18,600.00	77,461.00	86,951.00