Adjusting Entries: At December 31, 2019, Mr. Burns Good Old Fashion Cookies made the following adjusting entries.

A1. Mr. Burns recorded the depreciation for the fixed assets that he had bought through the year. The truck had 40,000 miles at December 31. Round to the nearest dollar.

A2. All of Mr. Burns prepaid rent expired.

A3. After Physical Inventory Conducted: Balance in plant supplies at year end: $500. Balance in office supplies at year end: $7000

A4. Income Taxes accrued $120,000. This is to be paid March 15, 2020

A5. Office Salaries accrued $20,000. Wages accrued $15,000

A6. Mr. Burns uses the balance sheet approach to estimate how money he will lose in uncollectible accounts. Since the city of Springfield is in a serve recession, Mr. Smithers estimated for Mr. Burns that 5% of this year ending accounts receivable will be uncollectible.

A7. Two months of the patent have expired. A8. Mr. Smithers discovered a sale on account earned by not yet recorded, $50,000. Since this amount was discovered after the estimate for uncollectible account, this amount WILL not be included in adjusting entry

A6. There were no discount terms

A9. Mr. Smithers performed an analysis of the value of the business to see if there was any goodwill impairment. Based on his analysis, there was no impairment. A10. Mr. Burns stands the possibility of getting sued from the owner of the Shellbyville plant due to him using ringers in the softball game where a $1,000,000 was betted. Mr. Smithers estimated that the range could be between $1,000,000 to $10,000,000. The high priced lawyers could not estimate the likely outcome of the lawsuit and had no idea of the time table.