ax due on Decemier 51 No. 852 to Alvarez Bank for 31. (Record both the r $2.300 to purchase 11.S. savinge bonds to the employee pension plan. The snnual pension cont is S65.5 to Instructions 1. Journalize the t 2. Journalize the following adjusting entries on December 51 payment and the unfunded a. Salaries accrued: sales salaries, $4,275, officers salaries, $2,175, office salaries, $825. The payroll taxes are immaterial and are not accrued. b. Vacation pay, $13,350. mprehensive Problem 3 Selected transactions completed by Kornett Company during its first fiscal year ended De cember 31, 2016, were as follows: Jan. 3. Issued a check to establish a petty cash fund of $4,500. Feb. 26. Replenished the petty cash fund, based on the following summary of petty cash al assets receipts: office supplies, $1,680, miscellaneous selling expense, $570, miscella neous administrative expense, $880 Apr. 14. Purchased $31,300 of merchandise on account, terms 1/10, n/30. The perpetual inventory system is used to account for inventory. May 13. Paid the invoice of April 14 after the discount period had passed. 17. Received cash from daily cash sales for $21,200. The amount indicated by the cash register was $21,240. une 2. Received a 60-day, 8% note for $180,000 on the Ryanair account. Aug. 1. Received amount owed on June 2 note, plus interest at the maturity date. 24. Received $7,600 on the Finley account and wrote off the remainder owed on a $9,000 accounts receivable balance. counting for uncollectible receivables.) The allowance method is used in ac- Sept. 15. Reinstated the Finley account written off on August 24 and received $1,400 cash 15. Purchased land by issuing a $670,000, 90-day note to Zahorik Co., which Oct. 17. Sold office equipment in exchange for $135,000 cash plus receipt of a $100,000, in full payment. discounted it at 9%. 90-day, 9% note. The equipment had a cost of $320,000 and accumulated depreciation of $64,000 as of October 17 Nov. 30. Journalized the monthly payroll for November, based on the following data: Deductions Salaries $39,266 12,735 3,184 $135,000 Income tax withheld Sales salaries Office salaries 77250 Social security tax withheld 212,250 Medicare tax withheld Unemployment tax rates State unemployment Federal unemployment 5,4% 0.8% Amount subject to unemployment taxes: State unemployment Federal unemployment $5,000 5,000 Continued) 30. Journalized the employer's payroll taxes on the payroll. of which 5139.700 at December S1, 52850000 d Deponit in transit, not reconded by bank. $29.500 e. Bank debit memo for service charges, $75o. r A check for $12,70o in rspond to He Rased on the following selected data, journalize the adjusting entries as of the current year S Blased on the bank based on an ccounts receivable. The tbalance of Allowance for Doubeful Accounts ar n was $2,000 (debit. b. The physical inventory on December 31 indicated an inventory shrinkage e C. Prepaid insurance expired during the year, $22.520. d. Office supplies used during the year, $3,920 Useful Life 50 lanuary 2 Buldings$900,000 J Office Equip 246,000 26.000 January 3 Store Equip. 112000 12,000 JulyT Straight-line f. A patent costing $48,000 when acquired on January 2 has a remaining legal l 10 years and is expected to have value for eight years. &The cost of mineral rights was $546,000. Of the estimated deposit of 910 0 of ore, 50,000 tons were mined and sold during the year h. Vacation pay expense for December, $10,500. i. A product warranty was granted beginning 1 and covering a one-yea period. The estimated cost is 4% of sales, which totaled $1,900,000 in December j. Interest was accrued on the note receivable received on October 17, 5. Based on the following information and the post-closing trial balance that prepare a balance sheet in report form at December 31 of the current year The merchandise inventory is stated at cost by the LIFO method The product warranty payable is a current liability. Vacation pay payable Current liability Long-term liability $7,140 3,360 The unfunded pension liability is a long-term liability Notes payable: Current liability Long-term liability 70,000 630,000 Chapter 10 Current Liabilities and Payroll 497 Kornett Company Post-Closing Trial Balance December 31,2016 Petty Cash Cash Notes Receivable Allowance for Doubtful Accounts. Merchandise Inventory 243,960 100,000 470,000 16,000 Interest Receivable 320,000 1,875 45,640 13.400 654,925 900,000 Office Supplies. Accumulated Depreciation-Office Equipment.... 246,00036,000 44,000 112,000 5,000 30,000 25,470 Accumulated Depletion.... 42,000 4,710 40,000 Employees Federal Income Tax Payable State Unemployment Tax Payable Federal Unemployment Tax Payable . . . . . 270 40 . . . . . . . 157,000 131,600 28,000 76,000 10,500 50,700 700,000 500,000 1,845,010 Vacation Pay Payable .. Unfunded Pension Liability.... 3,700,300 3,700,300