Problem # 1 Presented below is the December 31 trial balance of New York Bakery.

New York Bakery

Trial Balance

December 31, 2021

Debit Credit

Cash $ 19,000

Accounts Receivable 31,500

Allowance for Doubtful Accounts $ 1,700

Inventory 40,000

Prepaid Insurance 15,100

Furniture and Equipment 124,000

Accumulated DepreciationFurniture and Equipment 40,000

Notes Payable 35,000

Common Stock 60,000

Retained Earnings 28,000

Sales 700,000

Cost of Goods Sold 445,400

Sales Salaries Expense 85,000

Advertising Expense 16,700

Administrative Salaries Expense 70,000

Office Expense 18,000

$864,700 $864,700

Instructions:

Only the worksheet (b) is to be done on excel, the rest of this problem (a, c, d, e, f) is to be done using pencil and paper.

(a) Construct T-accounts and enter the balances shown.

(b) Create a 10 column worksheet using Excel (follow the sample on page 3-47, appendix illustration 3C.1). ALL the calculations on the worksheet must be done using formulas (vertical and horizontal). You must format the worksheet so it prints out on a single sheet of paper (81/2 x 11, Landscape).

1. Bad debt expense is estimated to be $2,500.

2. Furniture and equipment is depreciated is $500 per month.

3. Insurance expired during the year $7,000.

4. Interest accrued on notes payable $3,630.

5. Sales salaries earned but not paid $3,600.

6. Advertising paid in advance $1,500.

7. Office supplies on hand $2,400, charged to Office Expense when purchased.

8. Ending Inventory is $29,500

9. Income Tax Expense is 20% of Income before Income Tax

The cash account should not be adjusted, it is correct as stated.

(c) Prepare a General Journal showing the adjusting journal entries from the worksheet. (Omit explanations.) Open additional T-accounts as necessary. (Assume a December 31 year-end)

(d) Post adjusting entries to the T-accounts. Be sure to recalculate the new ending balances for each account after adjusting entries are posted and again after closing entries are posted.

(e) Prepare closing entries.

(f) Post closing entries to the T-accounts; be sure to recalculate the new ending balances for each account