(a) You notice that for the fiscal year ended December 31, 2018, the bookkeeper has made most of the routine general journal entries throughout the year, but none of the adjusting or closing entries have been recorded (Use the Trial balance image).

The following information is provided for adjustments prior to closing the books. The CFO asks you to enter the adjustments into the spreadsheet using the tab labeled AJEs & Closing Entries. Also post these adjustments to the Trial Balance in the two columns to the right of the unadjusted trial balance. (CMC uses a perpetual inventory system.)

please show your work on numbers # 6,8,11

1. As of December 31^st, wages of $45,700 should be accrued; associated payroll taxes on these wages are $2,910. (Record in two separate adjusting entries. The payroll taxes are an expense to the company for unemployment benefits and recorded as a payable to the state & federal taxing authority.)

What is the Adj entry and closing entry?

2. The Unearned Consulting Revenue account has a balance before adjustment of $261,220 as of December 31, 2018. On May 1, 2018 a client paid CMC $148,400 cash in advance for a 14-month consulting services contract. CMC will earn revenue evenly over this 14-month period. This was the only prepayment received from clients during the entire 2018 fiscal year and recorded with a credit to Unearned Revenue. Of the remaining balance in Unearned Revenue (i.e. Beg. Balance at Jan 1 2018), 70% of the work was completed by year end.

What is the Adj entry and closing entry?

3. You discover that a sale of a product was made on account and recorded in December for $136,200; the product has not yet been shipped, therefore it is not considered to be delivered to the customer. The cost of the product was 55% of its selling price. CMC uses the perpetual inventory method.

What is the Adj entry and closing entry?

4. Bad debt expense is estimated to be 6% of ending Accounts Receivable. (Round to the nearest whole dollar.)

What is the Adj entry and closing entry?

5. CMC prepays for some insurance and advertising. The Prepaid Expense account has a balance of $26,774 at year end but before adjustment. This balance includes $9,180 for an 18-month casualty insurance policy purchased on June 1, 2018. Of the remaining prepaid balance, 80% of the advertising has now been used. (Round to the nearest whole dollar.)

What is the Adj entry and closing entry?

6. CMC records depreciation and amortization expense annually. They do not use an accumulated amortization account. (i.e. Amortization Expense is recorded with a debit to Amort. Exp and a credit to the Patent.) Annual depreciation rates are 7% for Buildings/Equipment/Furniture, no salvage. (Round to the nearest whole dollar.) Annual Amortization rates are 10% of original cost, straight-line method, no salvage. CMC owns two patents: Patent #FJ101 and Patent #CQ510. Patent #CQ510 was acquired on October 1, 2016. Patent #FJ101 was acquired on April 1, 2018 for $119,000. The last time depreciation & amortization were recorded was December 31, 2017.

What is the Adj entry?

7. The long-term liabilities were outstanding for all of 2018 and accrue interest at 8% APR. CMCrecords accrued interest quarterly (interest was last updated on Sept. 30.) The company is required to pay the interest annually each January 1^st.

What is the Adj entry?

8. CMC often allows customers to finance the purchase of their products through long-term lending agreements and therefore reports Long-term Notes Receivable on their Balance Sheet. These notes are interest bearing and earn CMC interest revenue. The beginning balance of Interest Receivable at January 1, 2018 was $3,500. The notes accrue interest at 8% APR and were outstanding for all of 2018. Interest is payable to CMC each December 31^st. You confirm that cash was received for interest in the amount of $15,900 at December 31, 2018 however no journal entry for this cash receipt has been recorded and the customers checks are still in the company safe waiting to be deposited in the bank. The adjusting entry to accrue interest revenue has not yet been recorded.

What is the Adj entry?

9. On December 15, CMCdeclareda dividend of $220,000, to be paid on January 20, 2019. It had not yet been recorded.

What is the Adj entry?

10. At December 31, the Long-Term Investments (Available-for-sale securities or AFS) had a fair value of $195,400. The AFS Investment was originally purchased on June 1, 2018 for $160,500. CMCuses a Fair Value Adjustment account (an adjunct/contra account to the Investments) to mark-to-market the investment portfolio at year end. CMCs tax rate is 21%.

What is the Adj entry?

11. Income tax is based on a 21% tax rate.

What is the Adj entry?

use the image for reference to the account titles:

THANK YOU!

ral Ledger Account Na Trial Ba Cash and cash equivalents Accounts Receivable Allow ance for doubtful accounts Interest Receivable Inventory Prepaid expenses Other Current Assets nvestments Fair Value Adjustment Notes Receiable Building Equipment and furniture Land Accum Depr Goodwil Patents Accounts Payable 92,063 913,780 29,462 3,500 270,160 26,774 16,063 160,500 220,000 876,418 332,983 656,465 493,951 1,169,343 s payable Interest payable Unearned Consulting Revenue Wages payable Payroll taxes payable Income ta payable Lonq term liabilities Common Stock Paid-in capital common stock Treasury Stock Retained Earnings 42,102 261,220 81,350 8,850 701,700 920,000 105,000 400,000 539,069 Accum Other Comprehensive Inc Salesr 9,253,346 1,169,385 ervice revenue Interest Revenue Sales returns Sales discounts Product cost of goods sold Service cost of goods sold Advertising Bad debtexpense Depreciation and amortization Professional Dues& subscription Gainlloss on disposal Income ta expense Insurance Interest expense Legal and accounting fees Miscellaneous Drfice expense Payroll taxes Property taxes Repair and maintenance Research and development Telephone Travel and entertainment Utilities EHpense Waqe Expense Salaries -Officers Income Summary 162,400 269,662 5,384,590 570,811 159,080 21470 4.790 80,144 42,102 106,650 9,048 220,114 136,975 104,570 42,028 470,680 20,085 38,391 47,049 964,670 710,000 --14.237.29 14,937 292