Accounting in Action: CM Corporation (CMC) In anticipation of growing demand for their products and services, Conner and Martin hired two new directors, Suzanne Lopez and Allison Knepp, giving them stock in the company as part of their hiring bonus. The founders, Conner and Martin, along with the two new directors, will be the management team. Conner and Martin consider themselves "upper management" and the two new directors "middle management." Conner and Martin have little accounting or business training so they are relying on Lopez and Knepp, both of whom have MBAs, to provide the business background. With the additions to the management team, CMC changed the company name to CM2 . Given the lack of any trained accountant on board, an accounting intern can be of great value to CM2 . To familiarize you with the company's operations, Conner and Martin have provided an unadjusted trial balance from the end of last year (2012) on an Excel spreadsheet. When you look at it, you find that the accounts are not in any particular order, which surprises you. Instructions (a) Download file 3a from the website. Prepare a trial balance in good form. General Ledger Account Name		Unadj. Balance 12/31/12
Balance Sheet Accounts	Debit		Credit
Cash and cash equivalents	72,337
Common Stock			920,000
Goodwill	397,740
Bad debt expense	0
Accounts Receivable	910,680
Office expense	220,114
Building	874,418
Payroll taxes	136,975
Research and development	470,680
Telephone	20,085
Investments	140,186
Wages - Officers	710,000
Other intangible assets	253,900
Other Current Assets	16,063
Investment income			13,230
Interest payable			5,100
Dues and subscriptions	21,470
Product cost of goods sold	5,384,590
Payroll taxes payable			8,850
Product sales discounts	269,662
Long term liabilities			588,500
Gross product sales revenue			9,293,346
Paid-in capital common stock			105,000
Advertising	163,870
Retained Earnings			539,069
Dividends
Net Income (Loss)			(1,410,325)
	10,062,770		10,062,770
Income Statement Accounts
Unearned revenue			205,720	Note: There were more additions and subtractions to this account beyond the July prepayment.
Service revenue			1,158,785		0.00
Product sales returns	162,400
Accounts Payable			1,169,343
Allowance for doubtful accounts			84,962
	.
Service cost of goods sold	570,811
Prepaid expenses	22,774
Land	348,791
Depreciation and amortization	64,500
Dividends payable			0
Equipment expense	150,781
Gain/loss on disposal	0
Income tax expense	0
Insurance	80,144
Interest expense	45,200
Accum Depr			656,465
Legal and accounting fees	106,650
Miscellaneous	9,048
Equipment and furniture	336,983
Wages payable			81,350
Property taxes	104,570
Repair and maintenance	42,028
Treasury Stock	400,000
Inventory	1,272,160
Travel and entertainment	38,391
Utilities	47,049
Wages	964,670
Income tax payable			0
Net (Income) Loss			1,410,325
	4,766,950		4,766,950