1.Record Journal entries to record all omitted transactions.

2.Prepare revised financial statements.

1.Record Journal entries to record all omitted transactions.

2.Prepare revised financial statements.

Lastly, you should get

Total Asset = 5,907,500 Total Liability = 509,260 Total OE = 5,398,240

Search 22:41 Wed 2 Dec 52% Assignment.pdf 11 INDIVIDUAL ASSIGNMENT (10% OF TOTAL GRADE) The following financial statements and additional information are available for PEK Company at the end of 2018 PEK Company Income statement For the year ended December 31, 2018 1,250,000 (636,500) 613,500 Sales revenue Cost of goods sold Gross profit Expenses: Depreciation expense - equipments Depreciation expense - building Wages and salaries expense Bad debt expense Income before taxes Tax expense (30%) Net income (58,000) (12,000) (34,000) (84.000) 425,500 (127,650) 297,850 PEK Company Statement of retained earnings For the year ended December 31, 2018 Retained earnings (1 January 2018) Add: net income Less: dividends Retained earnings (31 December 2018) 0 297,850 (35,000) 262,850 Search 22:41 Wed 2 Dec 52% Assignment.pdf 11 PEK Company Statement of financial position As of December 31, 2018 Current assets Cash 59,500 127,650 35,000 34,000 256,150 Accounts receivable Less: ADA Accounts receivable, Net Inventory Total current assets Noncurrent assets Equipments Less: Accumulated depreciation Equipments, Net Building Less: Accumulated depreciation Building, Net Total noncurrent assets Current liabilities 4,220,000 Accounts payable 700,000 Taxes payable (84,000) Dividends payable 616,000 Wages and salaries payable 223,000 5,059,000 Total current liabilities Noncurrent liabilities 290,000 (58,000) Total liabilities 232,000 Stockholder's equity 240,000 Common stock ($1 par value) (12,000) Additional paid-in capital 228,000 Retained earnings 460,000 Total owner's equities 256,150 100,000 4,900,000 262.850 5,262,850 Total assets 5,519,000 Total liabilities and equities 5,519,000 Additional information a. During the year-end audit, it was discovered that a July 1, 2018, transaction for the lump-sum purchase of mixing machine and boiler was not recorded. The fair market values of the mixing machine and the boiler were $200,000 and $100,000, respectively. Each asset has an expected useful life of 10 years with no salvage value. The purchase of assets was financed by issuing a $270,000 five-year promissory note directly to the seller. Interest of 8 percent is payable annually on June 30 of every year. PEK uses straight-line method to depreciate all of its assets. However; PEK decides to use the double-declining balance method for the mixing machine and boiler rather than straight-line method. b. During the year-end audit, PEK was suggested to change way bad debts were estimated. PEK currently uses the percentage of accounts receivable method (12% of 700,000), but will have to revise its estimated bad debt expense using the aging of accounts receivable method. The information pertaining to the accounts receivable is given below: 3 of 3 Centralia Store O'hare Company Ruby Company Elmer Corporation Clever Store Kandel Company Total Amount ($) 130,000 75,000 250.000 80,000 70.000 95.000 700,000 Due date 17 January 2019 30th April 2018 12 December 2018 19 September 2018 14 July 2018 28th October 2018 Age 0-30 31-90 91-120 Over 120 % of collection 95 80 65 50 c. PEK unintentionally omitted the record of the issuance of preferred stock and repurchase of treasury stock transaction. On February 1, 2018, the company issued 10,000 shares of 2%, $10 par value preferred stock at a price of $50 per share. In addition, PEK repurchased its common stock 20,000 shares on October 15 at a price of 35 per share and subsequently sold half of the treasury stocks to the market at a price of $40 per share on December 25, 2018. The total dividend declared was 35,000. Required: 1. Record journal entries to record all omitted transactions. 2. Prepare revised financial statements. NOTE: PLEASE SHOW WORKING IN DETAILS FOR ALL CHANGES MADE TO THE FINANCIAL STATEMENTS