Scenario for adjusting entries: Year end is December 31, 2017.
Peyton Baking Company uses the following accounting practices:
 Inventory: Periodic, FIFO for both baking and merchandise
o Baking supplies: $27,850 ending inventory
 Equipment: Straight line method used for equipment
o Mixing machine: $5,000 initial cost, $500 salvage value, 3rd year of use of 7 total ($642.86 per year)
o Ovens: $8,000 initial cost, $1,000 salvage value, 3rd year of use of 7 total ($1,000 per year)
o Other depreciable equipment: $4,000 initial cost, $0 salvage value, 1st year of use of 4 total ($1,000 per year)
o Bakery Leasehold Improvements: $10,000, 2nd year of use ($2,000 per year)
o Trademark for company name: Initial cost, $2,300, 3rd year of use
 Office supplies: Periodic, FIFO. Ending balance is $250.
 Pay period is every 2 weeks. Last pay period ended December 27.
o 60 employees with a daily pay of $5,700. All receive pay through December 31.
 Financing:
o 6% interest note payable was made on January 31, 2017, and is due February 1, 2019.
o 5-year loan was made on June 1, 2017. Terms are 7.5% annual rate, interest only until due date.
 Insurance: Annual policy covers 12 months, purchased in February, covering March 2017– February 2018. No monthly adjustments have been made.
Other information: An employee slipped and fell in the baking area and has filed a lawsuit. The company lawyer indicates that it is probable that the company will be found liable. No additional information is available.

Specifically, you must address the critical elements listed below. Most of the critical elements align with a particular course competency (shown in brackets). I. Part I: Final Project Workbook A. Demonstrate the year-end adjustment process:
1. Prepare the adjusting journal entries in the Adjusting Entries tab in the provided workbook.
2. Transfer the values from the Adjusting Entries tab to the proper cells of the Adjusting Entries columns in the Worksheet tab.
3. Create the adjusted trial balance by computing the Adjusted Trial Balance columns using the Worksheet tab.
4. Close temporary accounts by completing the Closing Entries tab.
B. Prepare the financial statements:
1. Prepare an income statement for the provided company by completing the Income Statement tab in your workbook.
2. Prepare a statement of retained earnings by completing the Statement of Retained Earnings tab.
3. Prepare a balance sheet by completing the Balance Sheets tab.

Answer rating: 100% (QA)

adjusting journal entries in the Adjusting Entries tab in the provided workbook Adjusting Journal Entries Depreciation Expense Mixing Machine 64286 Accumulated Depreciation Mixing Machine 64286 Deprec... View the full answer