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ACCT 207 PROJECT Adjusting Journal Entries and Financial Statements Purpose Improve your understanding of the relationships between the financial statements; increase your confidence in preparing and recording accounting entries; increase your ability to understand the prepuration of formal financial statements. Instructions Included are the unadjusted trial balance for Sinfully Sweet Desserts at December 31, 2025, and a list of adjusting journal entries required at year-end. - First, enter the December 31,2025, beginning balances from the Unadjusted Trial Balance into your accounting "system" (i.e., enter the beginning balances into the T-accounts provided on pp. 4-7). - Second, "record" (i.e., write out in proper journal entry format) each of the adjusting entries from page 3 on page 8 (i.e., on blank page with the header "Adjusting Entries"). IMPORTANT - Don't forget to post each of these adjusting entries to the correct Taccounts on pp. 4-7 - this ensures that your adjusting entries are properly updating the various accounts in your "system". - After journalizing and posting all of your adjusting entries, tally up all the ending balances in the T-accounts on pp. 4-7. Then, use these ending balances to fill out the Adjusted Trial Balance on page 9 . - From the Adjusted Trial Balance, then your accounting "system" (i.e., you) will complete the Multiple-Step Income Statement (p. 10), Statement of Retained Earnings (p. 11) for the year ended December 31, 2025, and the Classified Balance Sheet (p. 12) as of December 31, 2025. (Hint: One of your asset accounts will have a zero balance.) Expectations This is an individual project. Therefore, each student will tum in his/her own copy of this completed packet. However, I want this to be a pleasant learning experience. Therefore, while I want everyone to complete their own packet, I encourage you to work together! Have "fun" with it! Due Date All packets must be submitted to me by 5:00pm on If you do not turn in the project by this date, you will receive a zero-no exceptions. Further, if you decide that you want to turn in the project before the deadline, that's fine by me! In fact, I encourage you to do so! Sinfully Sweet Desserts Unadjusted Trial Balance nonemher 31.2025 Adjusting \& Other Entries: December 31: In reviewing the bank statement, we find that during December, $2,100 in revenue was incorrectly debited to inventory instead of cash (the credit was corroct). December 31: Determine that we camed (but haven't received) $11,300 in interest revenue on our savings account during the year. December 31: We eamed $10,900 in sweets sales revenue during December 2025 that was paid for in advance by our eustomers. The cost of those sweets was $4,900. Prepare entries to record both the sale and cost of goods sold. Record both entries. December 31: Entire year's advertising ( $1,200 per month) was paid in advance on January 1, 2025 (recorded in January) - one month of Prepaid Advertising remains to be recorded as Advertising Expense. December 31: Determined that $1,700 of supplies remain at the end of the period. December 31: December utilities are \$2,799. The bill will be paid in January 2026. Utilities Expense and a Utilities Payable should be recorded. December 31: The company has not recorded bad debt expense for 2025. Sinfully uses the Aging of Receivables approach and estimates that the ending balance in the Allowance for Bad Debts should be $9,300 (Hint: You need to "back in" to this number - Ch. 8 ). December 31: The long term note payable was recorded on August 1, 2025. The interest and the note are due on July 31,2030 . Interest nate is 9.5%. Record 2025 interest expense. December 31: Calculate Net Income Before Taxes and then record income taxes as 35% of this number (use the Multiple-Step Income Statement) - use this tax \# to record the final adjusting entry for Income Tax Expense \& Income Tax Payable AND as the Income Tax Expense figure in your Multiple-Step Ineome Statement. Note The taxes will be paid in March 2026. December 31: The bookkeeper forgot to enter a journal entry into the system. Therefore, you must also record an entry for a $11,500 dividend payment that the company made to its shareholders. (Debit Dividends \& Credit Cash). This entry will not affect the tax entry above, as Dividends are not recorded on the Income Statement (but instead reduce RE on the Statement of RE). Adjusting Entries diusted Trial Balanc Sinfully Sweet Desserts Adjusted Trial Balance December 31, 2025 Multiple-Step Income Statement Sinfully Sweet Desserts Statement of Retained Earnings For the Year Ended December 31, 2025 Balance Sheet Sinfully Sweet Desserts Balance Sheet As of December 31,2025

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