asap

You are an internal auditor for Shannon Supplies, Inc., and are reviewing the company's preliminary financial statements. The statements, prepared after making the adjusting entries, but before closing entries for the year ended December 31, 2021, ore as follows: BRANDON SUPPLIES, INC. Balance sheet December 31, 2021 (5 in thousands) Asseto Cash Investment in equity securities Accounts receivable, net Inventory Iquipment LABNI Accumulated depreciation Total assets Liabilities and Shareholders' Equity Accounts payable and acerued expenses Income tax payable Connon stock, 91 par Additional paid.in capital Retained earnings Total liabilities and shareholdere equity 52,370 235 780 1.030 1,210 (1590) 65,035 $3,290 190 170 665 $5,035 BRANNON SUPPLIES, INC. Theme Statement For the Year Ended December 31, 2021 16. in thousands Gales revenue $3,790 Operating expesses Par Andet For the Year Ended December 31, 2021 ($ in thousands) Sales revenue $3,790 Operating expenses Cost of goods sold $1,110 Selling and administrative 893 Depreciation 87 2,090 Income before income tax $1,700 Income tax expense (425) Net income $1,275 Shannon's income tax rate was 25% in 2021 and previous years. During the course of the audit, the following additional information (not considered when the above statements were prepared) was obtained: a. Shannon's investment portfolio consists of blue chip stocks held for long-term appreciation. To raise working capital, some of the shares with an original cost of $177,000 were sold in May 2021. Shannon accountants dedited cash and credited investment in equity securities for the $214,000 proceeds of the sale. b. At December 31, 2021, the fair value of the remaining equity securities in the investment portfolio was $257,500. c. The state of Alabama filed suit against Shannon in October 2019, seeking civil penalties and injunctive relief for violations of environmental regulations regulating emissions. Shannon's legal counsel previously believed that an unfavorable outcome of this litigation was not probable, but based on negotiations with state attorneys in 2021, now believes eventual payment to the state of $127.000 is probable, most likely to be paid in 2024. d. The $1,030,000 inventory total, which was based on a physical count at December 31, 2021, was priced at cost. Based on your conversations with company accountants, you determined that the inventory cost was overstated by $129,000. e. Electronic counters costing $106,000 were added to the equipment on December 29, 2020. The cost was charged to repairs. Shannon's equipment, on which the counters were installed, had a remaining useful life of four years on December 29, 2020, and is being depreciated by the straight-line method for both financial and tax reporting, 9. A new tax law was enacted in 2021 which will cause Shannon's income tax rate to change from 25% to 20% beginning in 2022. 9. A new tax iw was enacted in ZUZI WHICH will cause nonnon income tax rate to change from 25 Required: Prepare journal entries to record the effects on Shannon's accounting records at December 31, 2021, for each of the items described above. (if no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars not in thousands of dollars.) View transaction liat Journal entry worksheet 1 5 6 7 8 Record the gain on sale of investment with an original cost of $177,000 for $214,000 Note Enter debits before credits Debit Credit General Journal Transaction a(1)