1 Asoka Corp. prepared the following random list of assets, liabilities, revenues, and expenses from its December 31, 2020, accounting records. The beginning retained earnings as of January 1, 2020, was $63,100 and the owner, Loveline Kaur, received dividends of $25,100 during the year. Prepare the balance sheet for Osgood Corp. as of December 31, 2020. Accounts receivable $38,700 Service revenue $40,500 $117,50 Interest expense Supplies $14,900 Cash 0 $1,300 Note payable $28,000 Accounts payable $106,100 Salary expense $18,900 Utilities expense $5,200 Interest payable $1,600 Furniture (Net of Depreciation) $16,000 Rent expense $9,600 Salary payable $12,400 Automobiles(Net of Depreciation) $12,900 Common shares $30,500 Land $23,000 Problem 2 Shown below is the trial balance for Dunbar Corporation as at June 30, 2017, the company's year end. The company owner provides you with the following additional information: No interest has been paid yet on the note payable. The note has been outstanding since April 1 and the interest rate is 12%. The equipment originally cost $200,000 and has an estimated residual value of $10,000 and a useful life of 10 years. On June 1 the company renewed its insurance policy and paid a $1,800 premium for the year. It was correctly recorded at that time as prepaid insurance. On October 1, 2016 the company sold a 12-month service contract to a client for $200,000 and recorded it as Unearned Revenue because at that point they had not yet provided any service to the client. DUNBAR CORPORATION TRIAL BALANCE AS AT JUNE 30, 2017 Debit Credit Cash 8,900 Accounts receivable 28,000 Prepaid insurance 1,200 Equipment 100,000 Accumulated amortization 6,000 Accounts payable 12,000 Note payable 20.000 Unearned revenues 18.000 Common shares 10,000 Retained earnings 6,700 Sales & service revenue 240,000 Salaries 120,000 Rent 24,000 Supplies expense 29.500 Amortization expense 0 Insurance expense 1.100 Interest expense TOTAL $312.200 Required Prepare any adjusting entries recaired. Problem 3 1. Why is it important to prepare a bank reconciliation when the bank statement is received from the bank? 2. Prepare a bank reconciliation dated December 31, 2020, for Arlington Inc. based on the following information. Balance per bank statement is $18250.92. Balance per books is $21659.40. The December bank statement indicated a service charge of $32 Cheque #1170 for $500.50 and cheque #1185 for $2,500.00 were not returned with the bank statement. The bank had not received a deposit in transit of $6,434.22 when the bank statement was generated. A bank debit memo indicated an NSF cheque written by Bill Broke to Welcome Inc. on December 11, 2020, for $69. A bank credit memo indicated an interest revenue of $126.24 on December 15, 2020. Problem 4 Happy Valley Ltd. purchased machinery on January 2, 2019, at a total cost of $100,000. The machinery's estimated useful life is 5 years or 60,000 hours, and its residual value is $10,000. During 2019 and 2020, the machinery was used 8,000 and 7,500 hours, respectively. Compute depreciation under straight-line, units-of-production, and double-declining-balance methods for 2019 and 2020. Straight-line depreciation Units-of-production depreciation Double-declining-balance depreciation 2019 2020 Explain the concept of depreciation. Include in your discussion one common misconception regarding depreciation and its impact on the finances of a business. Problem 5 What is the relationship between Income Statement, Balance Sheet, and Cashflow Statement