Are the adjusting journal entries and the explanations that I have in the rectangular boxes examples of applying the retrospective adjustment method of reporting accounting changes and errors in the above word problems, which I have interpreted and performed adjusting journal entries for? Is the adjusting journal entry involving the patent and the Miscellaneous expense account a good example of my applying the retrospective adjustment method of reporting accounting changes and errors in this assignment?

Other Items On December 31, 20xx, the company repaired a packaging machine at cost of $27,000.00. It is expected that the repair will extend the life of the machine by four years. No depreciation is necessary this year. The company spent $50,000 to obtain and defend a patent for its formula for dog treats. The patent took effect on 1/1/20XX and provides 20 years of protection. The $50,000 amount was incorrectly charged to Misc. Expense Make any necessary adjusting entries. On December 31, 20XX, the company repaired a packaging machine at cost of $27,000.00. It is expected that the repair will extend the life of the machine by four years. No depreciation is necessary this year. Based on the information in the instructor's direction and instruction 1. (a.), the following is incorrect. Adjusting Journal-Entryo Dated Account Title & Explanation Post Ref.cl Debito Credito Dec. 31, Packing machine (Plant asset) (A+) $27,000.000 20170 Cash (A+), o $27,000.000 Recorded repair of packing machine. O g Corrected adjusting journal entry for this Milestone #3-at the following: Adjusting Journal.Entryo Dated Account Title & Explanation Post-Refa Debito Credito Dec. 31, Baking equipment (Plant asset) (A+) $27,000.00 20170 Repairs and Maintenance Expense $27.000.000 (E+ Recorded the capitalization of the cost of the packing machine. 1 Since the repair of the packing machine, a type of baking equipment, extended the life of the packing machine, the cost-incurred-(become subject to) is required to be capitalized. --Or, I must capitalize the cost of the packing machine. --The-significance of this is that the packing machine will be incorporated in an equipment account and will reported in the property, plant-and- equipment-section of the balance sheet. --Its cost will be depreciated over the packing machine's estimated useful life. The company spent $50,000 to obtain and defend a patent for its formula for dog treats. The patent took effect on 1/1/20XX and provides 20 years of protection. The $50,000 amount was incorrectly charged to Misc. Expense Based on the information in the instructor's direction and instruction 8., the following is- incorrect. Adjusting-Journal Entryo Dated Account-Title- & Explanation Post-Ref.cl Debito Credito Dec. 31. Miscellaneous expense (E+) $50,000.00 20170 Patent (A-) $50,000.00 Recorded a Credito For-Milestone #3, the correct adjusting journal entry-looks like the following: Adjusting Journal-Entryo Date Account -Title-& Explanation Post Ref.cl Debita Dec. 31, Patent (A+) $50,000.00 20170 Miscellaneous expense (E-) Recorded historical purchase price of a patent and reversed an incorrect entry of Miscellaneous expense and amortized the patent at the end of 2017. $50,000.000 Since the dollar amount that was spent is for the patent, an intangible asset, the patent has to be amortized (decreased) across/over the patent's estimated useful life of 20 years rather than debiting the-Miscellaneous expense account (a/c). --I-am required (needed) to debit the account called patent, whereas I need to credit the-Miscellaneous expense account. Adjusting-Journal.Entryd Account Title & Explanation Post-Ref.cl Patent (A+) .. Dated Dec. 31, 20170 Credito Debito $50,000.000 $50,000.000 Cash (A-) Recorded purchase of patento $50,000 20 years =-$2,5001 Credito g Debito $2.500.000 In reality, the following adjusting journal entry is correct:- Adjusting Journal.Entryo Dated Account-Title-& Explanation Post-Ref. Dec. 31, Amortization expense (E+)o 20170 Patent (or Accumulated Amortization: --Patent) (CA+) Recorded amortization of patent cost.00 $2.500.000 0 Orf $50,000 20 years =-$2,5001 Credito For-Milestone #3, the following adjusting journal entry must be used. Adjusting-Journal.Entryo Date Account -Title- & Explanation Post-Ref.cl Debito Dec. 31, Patent (A+) $2.500.000 20170 Patent amortization (CA+) Recorded amortization of patent cost 0 0 $2,500.000 Book value Formula =-Historical purchase price--Accumulated-amortization/depreciation of tangible intangible- asset 1 = Book value (Net-book value, carrying value) of tangible intangible asset =:$50,000---$2,5001 1 = $47,5001 1 Peyton Approved reports-S47,500 ($50,000---$2,500-=-$47,500), the book value of the patent, in the intangible-assets-section of its balance sheet. *Refer to page 12-3 through-12-5-of-Learning Objective-12.1-Explain the accounting for intangible assets, including initial valuation, amortization and impairment of Chapter 12 Intangibles of Intermediate Accounting Reporting and Analysis, 2017-Update-2-e-James-Wahlen ISBN-10: 1337116610-Cengage-Learning 2016 1 2 3 Adjusting entries Dr Cr 4 Cr 5 6 1 265,000.00 7 8 9 Cash Marketable Securities Accounts Receivable Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Misc. Supplies Land Building Baking Equipment 10 Dr 1,488,999.34 5,235,000.00 7,092,495.88 1,605,098.52 128,152.63 71,877.07 207,834.14 17,647.42 250,000.00 1,250,000.00 2,382,654.00 PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 Dr Cr 1,488,999.34 5,500,000.00 7,092,495.88 1,605,098.52 128,152.63 71,877.07 207,834.14 17,647.42 250,000.00 1,250,000.00 2,254,140.00 7 328,282.00 8 1,555,212.85 250,203.31 21,888.22 11 12 13 14 15 101,514.00 27,000.00 16 17 328,282.00 18 50,000.00 8b 2,500.00 47,500.00 19 Accumulated Depreciation Patent Accounts Payable Wages Payable Interest Payable 20 1,555,212.85 250,203.31 21,888.22 21 22 1,000,000.00 1,042,118.163 23 24 Current Portion of Bonds Payable Income Taxes Currently Payable Accrued Pension Liability Accrued Employees Health Insurance Lease Liability 52,325.252 375.00 4 107,041.70 5 43,781.91 6a 101,514.00 1,000,000.00 990, 167.91 107,041.70 43,781.91 101,514.00 25 26 27 28 3 52,325.25 29 30 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 52,325.25 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 31 32 33 50,000.00 5,250,000.00 50,000.00 5,250,000.00 34 35 36 Deferred Tax Liability Bonds Payable Preferred Stock Common Stock Beginning Retained earnings Dividends - Preferred Dividends - Common Bakery Sales Merchandise Sales Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Rent Expense Wages Expense Misc. Supplies Expense Repairs and Maintenance 33,881,157.15 124,795.80 33,881,157.15 124,795.80 37 38 39 6b 10,954,907.36 88,994.79 1,576,731.95 2,604,526.23 263,224.56 47,353.05 20,000.00 10,954,907.36 88,994.79 1,556,731.95 2,604,526.23 263,224.56 20,353.05 40 41 42 5 27,000.00 43 44 8 50,000.00 45 6b 20,000.00 46 Business License Expense Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Pension Expense Retired Employees Health Ins. Patent Amortization 211,757.65 141,171.08 634,520.00 112,937.69 160,413.49 484,703.27 50,821.34 47 211,757.65 91,171.08 654,520.00 112,937.69 160,413.49 484,703.27 50,821.34 107,041.70 43,781.91 2,500.00 48 49 50 51 4 5 8b 107,041.70 43,781.91 2,500.00 52 53 Unrealized Gain/(Loss) on Marketable Securities Held for Sale 1 265,000.00 265,000.00 54 55 Income Taxes 4,168,472.62 2 375.00 4,168,847.62 56 57 58 59 46,666,780.08 46,666,780.08 669,537.86 669,537.86 46,919,492.69 46,919,492.69 Other Items On December 31, 20xx, the company repaired a packaging machine at cost of $27,000.00. It is expected that the repair will extend the life of the machine by four years. No depreciation is necessary this year. The company spent $50,000 to obtain and defend a patent for its formula for dog treats. The patent took effect on 1/1/20XX and provides 20 years of protection. The $50,000 amount was incorrectly charged to Misc. Expense Make any necessary adjusting entries. On December 31, 20XX, the company repaired a packaging machine at cost of $27,000.00. It is expected that the repair will extend the life of the machine by four years. No depreciation is necessary this year. Based on the information in the instructor's direction and instruction 1. (a.), the following is incorrect. Adjusting Journal-Entryo Dated Account Title & Explanation Post Ref.cl Debito Credito Dec. 31, Packing machine (Plant asset) (A+) $27,000.000 20170 Cash (A+), o $27,000.000 Recorded repair of packing machine. O g Corrected adjusting journal entry for this Milestone #3-at the following: Adjusting Journal.Entryo Dated Account Title & Explanation Post-Refa Debito Credito Dec. 31, Baking equipment (Plant asset) (A+) $27,000.00 20170 Repairs and Maintenance Expense $27.000.000 (E+ Recorded the capitalization of the cost of the packing machine. 1 Since the repair of the packing machine, a type of baking equipment, extended the life of the packing machine, the cost-incurred-(become subject to) is required to be capitalized. --Or, I must capitalize the cost of the packing machine. --The-significance of this is that the packing machine will be incorporated in an equipment account and will reported in the property, plant-and- equipment-section of the balance sheet. --Its cost will be depreciated over the packing machine's estimated useful life. The company spent $50,000 to obtain and defend a patent for its formula for dog treats. The patent took effect on 1/1/20XX and provides 20 years of protection. The $50,000 amount was incorrectly charged to Misc. Expense Based on the information in the instructor's direction and instruction 8., the following is- incorrect. Adjusting-Journal Entryo Dated Account-Title- & Explanation Post-Ref.cl Debito Credito Dec. 31. Miscellaneous expense (E+) $50,000.00 20170 Patent (A-) $50,000.00 Recorded a Credito For-Milestone #3, the correct adjusting journal entry-looks like the following: Adjusting Journal-Entryo Date Account -Title-& Explanation Post Ref.cl Debita Dec. 31, Patent (A+) $50,000.00 20170 Miscellaneous expense (E-) Recorded historical purchase price of a patent and reversed an incorrect entry of Miscellaneous expense and amortized the patent at the end of 2017. $50,000.000 Since the dollar amount that was spent is for the patent, an intangible asset, the patent has to be amortized (decreased) across/over the patent's estimated useful life of 20 years rather than debiting the-Miscellaneous expense account (a/c). --I-am required (needed) to debit the account called patent, whereas I need to credit the-Miscellaneous expense account. Adjusting-Journal.Entryd Account Title & Explanation Post-Ref.cl Patent (A+) .. Dated Dec. 31, 20170 Credito Debito $50,000.000 $50,000.000 Cash (A-) Recorded purchase of patento $50,000 20 years =-$2,5001 Credito g Debito $2.500.000 In reality, the following adjusting journal entry is correct:- Adjusting Journal.Entryo Dated Account-Title-& Explanation Post-Ref. Dec. 31, Amortization expense (E+)o 20170 Patent (or Accumulated Amortization: --Patent) (CA+) Recorded amortization of patent cost.00 $2.500.000 0 Orf $50,000 20 years =-$2,5001 Credito For-Milestone #3, the following adjusting journal entry must be used. Adjusting-Journal.Entryo Date Account -Title- & Explanation Post-Ref.cl Debito Dec. 31, Patent (A+) $2.500.000 20170 Patent amortization (CA+) Recorded amortization of patent cost 0 0 $2,500.000 Book value Formula =-Historical purchase price--Accumulated-amortization/depreciation of tangible intangible- asset 1 = Book value (Net-book value, carrying value) of tangible intangible asset =:$50,000---$2,5001 1 = $47,5001 1 Peyton Approved reports-S47,500 ($50,000---$2,500-=-$47,500), the book value of the patent, in the intangible-assets-section of its balance sheet. *Refer to page 12-3 through-12-5-of-Learning Objective-12.1-Explain the accounting for intangible assets, including initial valuation, amortization and impairment of Chapter 12 Intangibles of Intermediate Accounting Reporting and Analysis, 2017-Update-2-e-James-Wahlen ISBN-10: 1337116610-Cengage-Learning 2016 1 2 3 Adjusting entries Dr Cr 4 Cr 5 6 1 265,000.00 7 8 9 Cash Marketable Securities Accounts Receivable Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Misc. Supplies Land Building Baking Equipment 10 Dr 1,488,999.34 5,235,000.00 7,092,495.88 1,605,098.52 128,152.63 71,877.07 207,834.14 17,647.42 250,000.00 1,250,000.00 2,382,654.00 PEYTON APPROVED TRIAL BALANCE As of December 31, 2017 Dr Cr 1,488,999.34 5,500,000.00 7,092,495.88 1,605,098.52 128,152.63 71,877.07 207,834.14 17,647.42 250,000.00 1,250,000.00 2,254,140.00 7 328,282.00 8 1,555,212.85 250,203.31 21,888.22 11 12 13 14 15 101,514.00 27,000.00 16 17 328,282.00 18 50,000.00 8b 2,500.00 47,500.00 19 Accumulated Depreciation Patent Accounts Payable Wages Payable Interest Payable 20 1,555,212.85 250,203.31 21,888.22 21 22 1,000,000.00 1,042,118.163 23 24 Current Portion of Bonds Payable Income Taxes Currently Payable Accrued Pension Liability Accrued Employees Health Insurance Lease Liability 52,325.252 375.00 4 107,041.70 5 43,781.91 6a 101,514.00 1,000,000.00 990, 167.91 107,041.70 43,781.91 101,514.00 25 26 27 28 3 52,325.25 29 30 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 52,325.25 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 31 32 33 50,000.00 5,250,000.00 50,000.00 5,250,000.00 34 35 36 Deferred Tax Liability Bonds Payable Preferred Stock Common Stock Beginning Retained earnings Dividends - Preferred Dividends - Common Bakery Sales Merchandise Sales Cost of Goods Sold - Baked Cost of Goods Sold - Merchandise Rent Expense Wages Expense Misc. Supplies Expense Repairs and Maintenance 33,881,157.15 124,795.80 33,881,157.15 124,795.80 37 38 39 6b 10,954,907.36 88,994.79 1,576,731.95 2,604,526.23 263,224.56 47,353.05 20,000.00 10,954,907.36 88,994.79 1,556,731.95 2,604,526.23 263,224.56 20,353.05 40 41 42 5 27,000.00 43 44 8 50,000.00 45 6b 20,000.00 46 Business License Expense Misc. Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense Pension Expense Retired Employees Health Ins. Patent Amortization 211,757.65 141,171.08 634,520.00 112,937.69 160,413.49 484,703.27 50,821.34 47 211,757.65 91,171.08 654,520.00 112,937.69 160,413.49 484,703.27 50,821.34 107,041.70 43,781.91 2,500.00 48 49 50 51 4 5 8b 107,041.70 43,781.91 2,500.00 52 53 Unrealized Gain/(Loss) on Marketable Securities Held for Sale 1 265,000.00 265,000.00 54 55 Income Taxes 4,168,472.62 2 375.00 4,168,847.62 56 57 58 59 46,666,780.08 46,666,780.08 669,537.86 669,537.86 46,919,492.69 46,919,492.69