Adjusting Journal Entries (AJEs): 1. Wages earned by employees during December (15) and to be paid in January (16) are $35,875; 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.) 2. The Unearned Consulting Revenue account has a balance of $261,220 as of December 31, 2015. On May 1, 2015 a client paid CMC $153,000 cash in advance for a 12-month consulting services contract. CMC will earn revenue evenly over this 12-month period. This was the only prepayment received from clients during the entire 2015 fiscal year and recorded with a credit to Unearned Revenue. Of the beginning balance in Unearned Revenue (i.e. at Jan 1 2015), 65% of the work has now been completed by year end. 3. You discover that a sale of a product was made on account and recorded in December for $148,500; the product has not yet been shipped (i.e. delivered to the customer). The cost of the product was 55% of its selling price. CMC uses the perpetual inventory method. 4. Bad debt expense is estimated to be 6% of ending Accounts Receivable. (Round to the nearest whole dollar.) 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 $12,200 for a two-year casualty insurance policy purchased on March 1, 2015. Of the remaining prepaid balance, 60% of the advertising has now been used. (Round to the nearest whole dollar.) 6. Annual depreciation rates are 7% for Buildings & Equipment/Furniture. No salvage. (Round to the nearest whole dollar.) 7. The long-term liabilities were outstanding for all of 2015 and accrue interest at 8% APR. CMC records accrued interest quarterly (interest was last updated on Sept. 30.) The company is required to pay the interest annually each January 1st. 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, 2015 was $3,500. During 2015, cash received from customers for interest on these notes amounted to $17,600. You determine that the income statement for the year-ended December 31, 2015 should show Interest Revenue in the amount of $18,700. The adjusting entry to accrue interest revenue has not yet been recorded. 9. On December 15, CMC declared a dividend of $150,000, to be paid on January 20, 2016. It had not yet been recorded. 10. At December 31, the Long-Term Investments (Available-for-sale securities or AFS) had a fair value of $165,700. The AFS Investment was originally purchased on May 1, 2015 for $180,186. CMC uses 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 35%. 11. Income tax is based on a 35% tax rate. (b) After making the 11 adjusting entries in (a), record the appropriate closing entries on the spreadsheet provided using the tab labeled AJEs and Closing Entries. Post to the Trial Balance. (c) Complete the each of the required financial statements (Statement of Comprehensive Income, and Statement of Stockholders Equity) in good form. The Statement of Stockholders Equity should reconcile with your balance sheet, income statement, & Statement of Comprehensive Income. (Use cell referencing to link the appropriate cells from the other financial statements. Keep in mind that not all cells on the Statement of Stockholders Equity will require any updates. For example, no new stock was issued during 2015; the balance in the contributed capital accounts will therefore not change.)