(12 points) The following is a partial list of accounts and their balances were taken from the unadjusted trial balance of the Caleb Company as of Dec. 31, 2021, its fiscal year end: Accounts Receivable Note Payable $9,000 $50,000 Supplies Expense $2,400 Prepaid Insurance $1,500 I Equipment $10,000 Accumulated Depreciation $1,800 Deferred Rent Revenue $18,000 Prepare the ANNUAL adjusting entries associated with the following items (write "no entry" if none is needed). Note, if the appropriate account is not listed above, you must assume it has a $0 balance. (a) Rent was collected on 9/1/2021. It was a 12 month lease. (b) At the end of the year, Caleb had supplies on hand of $500. (c) The Note Payable is a 5 year note with a 12% interest rate, payable semi-annually on 5/1 and 11/1. The money was borrowed on 11/1/2021. If reversing entries were made on 1/1/2022, what entry would Caleb make for the payment of interest on 5/1/2022 (Just the interest payment)? (d) Ignore prior information: If cash revenues exceeded cash expenses by $30,000 for 2021. If inventory decreased by $600 during the year and accounts payable increased by $900 during the year, what was accrual net income? Problem #2 (13 points) Prepare a multi-step income statement (using good form) for the Christensen Corporation. Christensen Corporation had the following items on Dec. 31, 2021, prior to closing entries (note this is a partial list of all accounts in the adjusted trial balance): Accrued Wages Payable$ 25,000 Sales Revenues $4,000,000 Cost of Goods Sold $1,600,000 Admistrative Expenses $350,000 Retained Earnings Inventory Allow for Doubtful Acct $ 1,600 $700,000 Prepaid Rent $ 85,000 $100,000 Investments $ 45,000 Interest Revenue $ 3,000 Accum, Depr-Equip. $ 390,000 Uneamed Rent Revenue $ 5,000 Selling Expenses $ 120,000 The appropriate tax rate for all income statement items is 30% for all items. (1) You have discovered that for the years 2020, 2021, Christensen Corporation's bookkeeper erroneously computed depreciation of a building. The correct amount of depreciation expense was $80,000 per year, but the bookkeeper recorded $40,000. Depreciation Expense is shown as part of Administrative Expenses. (2) The company discontinued a business segment. The net loss during the year was $80,000 before taxes, and the company disposed of assets with a book value of $200,000 and a fair value of $100,000. It does qualify for treatment as a discontinued operations. (3) The company had 1,000,000 shares of stock outstanding during the year. Show EPS for all appropriate amounts. Problem 3 (12 points) Answer each of the three independent situations, and be sure to show your work. Round all answers to nearest whole number. (A) Buck has land that he wants to sell. The land has an original cost of $50,000. Buck accepts in exchange a note receivable with a principal balance of $60,000. The note pays interest at only 1% per year, with the principal due in 5 years. If the market rate of interest for this note receivable is 8% per year, what is Buck's gain or loss on sale? N= 1= PMT= FV- PV= I Work (if necessary) Answer H (B) The DePuy Company is going to be issuing bonds with a principal amount of $50,000. The bonds pay 4% interest, payable semi-annually, with payments on July 1 and Jan. 1. The bonds will mature in 5 years. At the time the bonds are to be issued, the market rate of interest is 6%. How much money will DePuy receive at the time the bonds are issued? N PMT= FV- PV= Work (if necessary) Answer (C) Chance wants to save money to become a millionaire by age 42 (20 years). Chance currently has $50,000 to put into an investment. He can save money every year to put into an investment (at the end of the year). If the investment earns 10% per year, how much will Chance need to save to reach his goal? N= Work (if necessary) Answer I= PMT= FV- PV For Problem 4 (13 points) Sunshine Ski Slopes sells a ski season package for $900. The package includes a season pass that runs from Nov.1, 2021 through April 30, 2022 (6 months); the pass would normally sell for $700. In addition, the package includes a ski jacket that would typically sell for $200. And lastly, the package Includes a 40% discount on a future purchase of merchandise at the gift shop, redeemable in 2022. Sunshine expects 30% of the discounts to be redeemed on an average purchase of $100. Sunshine sold 100 season packages on Oct. 15, 2021. (round to the nearest $1) Instructions: Record the (1) sale of the packages on Oct 15 (YOU CAN IGNORE the recognition of Cost of Goods Sold) and (2) the adjustments made on Dec. 31. Be sure to show your work. Oct 15 Entry Acct and Amount Debit Account and Amount Debit Dec 31 Entry Acct and Amount Debit Account and Amount Debit