$1.$ Wages earned by employees during December and to be paid in January are $$33,875$; associated payroll taxes on these wages are $$2,710.$

$2.$ On July $1,$ a client paid CMC $$205,720$ in advance for a year of consulting services.

$3.$ You discover that a product sale was made and recorded in December for $$128,600$; the product had not yet been shipped. The cost of the product was $$68,742.$

$4.$ Bad debt expense has been calculated to be $$17,508$ but has not yet been recorded.

$5.$ The Prepaid Expense account has a balance of $$22,774.$ This balance includes $$11,200$ for a two$-$year insurance policy purchased on January $1,2020.$

$6.$ Depreciation expense for the year is $$82,620.$

$7.$ Interest expense accrued on its long$-$term liabilities is $$7,765.$

$8.$ On December $15,$ CMC declared a dividend of $$110,000,$ to be paid on January $15,2021.$

$9.$ Income tax expense is $$201,109.$

A$)$ Download the file named CMC$2020.$xls$,$ which has the unadjusted trial balance. This file also contains an accounting $$system$$ comprised of a series of linked spreadsheets. The linkages should enable the effects of all accounting entries $($journal$,$ adjusting, and closing$)$ to flow through to spreadsheets for the income statement, balance sheet, and statement of cash flows. Check the links to make sure they are all right. Fix any missing or erroneous links $($You will find a few in $$stmtcashflows$).$ Create a sheet $$Note$$ and document your repair work.

$($B$)$ You realize that you must prepare the necessary adjustments and perform the closing process first. You will do this by $(1)$ creating a sheet $$AJE$$s and Closing Entries$$ to list each AJE and $(2)$ entering the adjustments in columns E and G of sheet $$trialBal$2020.($Do not forget to enter JE# for easy reference. CMC uses a perpetual inventory system.$)$

$($C$)$ Close the temporary accounts by $(1)$ listing the closing entries in the sheet named $$AJE$$s and Closing Entries$$ and $(2)$ posting the closing entries in columns K$-$M of $$trialBal$2020.$

$($D$)$ Create post$-$closing trial balance in columns N and P of $$trialbal$2020.$ Check the numbers in post$-$closing trial balance and those on $$balancesheet$$ to make sure the balance sheet is correct.

$($E$)$ Write a brief memo to the CMC management, summarizing the work you have done and any issues you have noticed. In particular, you heard Mr$.$ Martin talking about $7\%$ profit ratio for $2020.$ You will make a point in the memo about why adjusting entries are necessary and how the adjusting entries led to a profit ratio lower than $7\%$

o X

CM Corporation

Statement of Cash Flows

Indirect Method $)$

For the Years Ended

December $31,2020$

December $31,2019$

$$681,673$