Four Major Adjustments (Alternates are 4-35, 4-37, and 4-39). The Goodyear Tire & Rubber Company included the follow- ing items in its December 31, 2002 balance sheet ($ in millions): Prepaid expenses (a current asset) United States and foreign taxes (a current liability) $ 448.1 473.2 1. Analyze the impact of the following transactions on the financial position of Goodyear as of January 31, 2003. Prepare your analysis in the same format used when the adjustment process was explained in the chapter. Also show adjusting journal entries.

a. On January 31, an adjustment of $5 million was made for the rental of various retail outlets that had originally increased Prepaid Expenses but had expired.

b. During December 2002, Goodyear sold tires for $7 million cash to U-Haul, but delivery was not made until January 28, 2003. Unearned Revenue had been increased in December. No other adjustments had been made since then. Prepare the adjustment on January 31.

c. Goodyear had loaned cash to several of its independent retail dealers. As of January 31, the dealers owed $6 million of interest that had been unrecorded.

d. On January 31, Goodyear increased its accrual of federal income taxes by $68 million. 2. Compute the ending balances on January 31, 2003 in prepaid expenses and in U.S. and foreign taxes.