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, 2017:

Additional facts:
1. Bud's Bakery uses a periodic inventory system.
2. A physical count determined that merchandise inventory on hand at November 30, 2017, was $37,350.
3. Of the mortgage payable, $8,500 is due on March 31, 2018.
Instructions
(a) Prepare a multiple-step income statement, statement of owner's equity, and classified balance sheet for the November 30, 2017, 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.
Taking It Further
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 Accounts receivable Merchandise inventory Mortgage payable 34,360 106,000 urance Accumulated depreciation-equipment B. Hachey, capital B. Hachey, drawings Property tax expense Purchase returns and allowances Rent revenue Salaries expense Depreciation expense Insurance expense Sales returns and allowances Unearned revenue Utilities expense