$1.$ Prepare the journal entries required for $2023,$ including any year$-$end adjusting entries. Provide an explanation of why each entry is required and how it was calculated $($you can show your calculation in the Excel spreadsheet$).$ The company prepares annual adjusting entries.

$2.$ Prepare the classified Statement of Earnings, Statement of Retained Earnings, and classified Statement of Financial Position, for the period ended and as at December $31,2023.$

Exhibit $1$ includes an unadjusted trial balance at December $31,2023.$

Exhibit $2$ includes information on $2023$ transactions which require analysis and recording using Accounting Standards for Private Enterprises $($ASPE$).$

Exhibit $2$

Additional information

$1.$An annual insurance policy was purchased on October $1,2023,$ effective the same day, for $$7,200$ cash.

$2.$A count of supplies was done on December $31,2023,$ where $$1,340$ worth of supplies was found on hand.

$3.$CBCS uses a perpetual inventory system to account for inventory. Below is a breakdown of inventory on hand at December $31,2023$:

Cost

Net Realizable Value

Inventory $-$ Raw ingredients

$$9,200$

$$10,400$

Inventory $-$ Finished goods

$$10,300$

$$9,700$

$4.$The company ran out of cake and pastry flour, which is a key ingredient. They placed an order for $50$ bags of the flour at a cost of $$25$ each on December $28,2023.$ Terms of this order were $2/10,$ n$/30,$ FOB shipping point. The company received an email notifying them of shipment on December $31,2023,$ and it generally takes $5$ businesses days to deliver. Chloe looked forward to replenishing stocks and adding them to inventory upon receipt.

$5.$CBCS has the following long$-$lived assets:

Date of purchase

Depreciation method

Land

January $1,2020$

Buildings

January $1,2020$

Straight$-$line

Estimated useful life $20$ years

Furniture

January $1,2022$

Double$-$declining balance

Estimated useful life $10$ years

Residual value $$400$

Machinery

July $31,2022$

Units$-$of$-$production

Estimated to be able to produce $10,000$ units in total

Produced $900$ units in $2023$

Computer

September $30,2023$

Straight$-$line

Estimated useful life $5$ years

Residual value $$500$

$6.$Customers must pay a $$1,000$ non$-$refundable booking deposit for a catering package provided by CBCS$.$ An analysis of bookings during $2023$ indicated that $80$ deposits were received and credited to Deferred Revenue. By December $31,2023,$ CBCS had provided the catering service and completed $65$ of the $80$ bookings but had not recorded anything yet.

Cash received from all the sales is counted daily and is deposited in the company$$s bank account at the end of each month. Bank reconciliations are prepared on an annual basis.

$7.$A local business made an advance payment of $$3,500$ to TBCS on December $15,2023$ for an event to be held in March $2024.$ This amount was credited to Service Revenue at the time of receipt.

$8.$CBCS delivered meals worth $$1,800$ to a customer in October $2023,$ but has not received the payment and all methods of contacting the customer have been exhausted and the amount has been deemed uncollectible.

Chloe has reviewed the accounts receivable balance and notes that $60\%$ of accounts receivable balance relates to corporate events, and the rest relates to non$-$coporate events. Normally CBCS collects all of its outstanding receivables. Due to the unusual economic conditions during the year, Chloe fears this year might be different. She estimates that $10\%$ of corporate receivables might not be collected and $15\%$ of non$-$corporate receivables might not be collected.

$9.$CBCS has a monthly payroll of $$14,000$ and pays its employees on the $15$th of every month for work done in the previous month. The payroll needs to be considered in preparing year$-$end financial statements.

$10.$ The December $2023$ utility bill of $$1,650$ has not yet been recorded nor paid.

$11.$CBCS is subject to income tax and the tax rate is $20\%.$

$12.$ Chloe hired a payroll clerk, who is a very hard worker and did not take vacation in $2023.$ Employees do not typically report payroll errors, so Chloe does not monitor the payroll clerk closely