B C D E F G DeeDee Double Entry, Incorporated End of Period Worksheet For the Year Ended December 31, 2019 Unadjusted Adjusted 5 Account Title Trial Balance Adjustments Trial Balance 6 DR CRDR CRL DR CR 7 Cash 160,000 - 8 Accounts Receivable 768,500 9 Allowance for Doubtful Accounts 2,500 10 Interest Receivable 11 Merchandise Inventory 372,500 12 Prepaid Insurance 6,000 13 Prepaid Advertising 12,000 14 Prepaid Rent 15 Office Supplies 5,000 16 Note Receivable 180,000 17 Available for Sale Debt Investments 100,000 18 Available for Sale Equity Investments 400,000 19 Office Building 3,100,000 20 Accumulated Depreciation - Office Building 155,000 21 Land 850,000 22 Office Equipment 250,000 23 Accumulated Depreciation - Office Equipment 25,000 24 Copyrights 150,000 25 Accounts Payable 345,000 26 Sales Tax Payable 27 Salaries Payable 28 Payroll Taxes Payable 29 Interest Payable 30 Income Tax Payable 31 Unearned Revenue 32 Loan Payable - Coldstar Bank 1,500,000 33 Common Stock 800,000 34 Additional Paid in Capital 1,200,000 35 Retained Earnings 889,420 36 Accumulated Other Comprehensive Income 8.500 37 Dividends 240,000 38 Sales 4,683 750 39 Sales Returns and Allowances 21.700 40 Sales Discounts 17,200 41 Cost of Goods Sold 1.757 200 42 Sales Salaries Expense 476,400 43 Office Salaries Expense 434,000 44 Advertising Expense 54,000 45 Depreciation Expense - Office Building 46 Depreciaiton Expense - Office Equipment 47 Leasing Expense - Stores 244,000 48 Miscellaneous Selling Expense 16,950 49 Research & Development Expense 50 Rent Expense - Storage Facility 24,000 51 Insurance Expense 2.000 52 Office Supplies Expense 17,500 53 Miscellaneous Administrative Expense 9,220 54 Rent Revenue 48,000 55 Interest Revenue on Note Receivable 56 Unrealized Gain/Loss -Income 57 Unrealized Gain/Loss - OCI 58 Interest Revenue on Debt Investments 4,000 59 Dividend Revenue on Equity Investments 12.000 60 Interest Expense 61 Bad Debt Expense 62 Amortization Expense 63 Income Tax Expense 9,670,670 9.670,670 Your required tasks are as follows: 1. Read the below information and follow steps #2 through #9 2. On the Adjusting Journal Entries worksheet, prepare in journal entry form all adjusting and correcting journal entries based on the following information. a. DeeDee does banking at three different financial institutions. The details are as follows: Bank Account # Balance Coterica 123456 85,000 Coterica 123457 (5,000) 4th Bank 345689 90,000 Bank Two 397567 (10,000) b. DeeDee properly wrote off uncollectible accounts during the year. Based on an aging schedule, they have determined that $85,000 of Accounts Receivable will not be collectible.. c. On May 1, 2019, DeeDee renewed a 12-month insurance policy for $6,000. All cash was paid at the time the policy was signed and prepaid insurance was increased. All other transactions involving insurance were properly recorded. d. On November 1, 2019 DeeDee paid ABC Advertising $12,000 for a three month campaign of advertising services. Equal services are provided each month. All other advertising paid for during the year has been consumed. e. Because of strong demand and a need for additional inventory, DeeDee needed some temporary additional storage space so on July 1 2019 they rented a unit for an annual rate of $24,000 and they paid the entire amount up front. The entire amount was expensed on July 1st f. Per a physical count of office supplies, $6,000 supplies remained at the end of 2019. The balance on the worksheet in the office supplies account represents last years ending balance. During the year, $17,500 of office supplies were purchased and immediately expensed. g. On July 1, 2019, DeeDee loaned a key supplier, $180,000. A promissory note was signed and issued. The agreed upon interest rate was 4.5% and the key supplier has agreed to pay interest and the note receivable on July 1, 2020. The note was recorded in Notes Receivable and is the only note outstanding. At December 31, 2019, no interest has been accrued... h. The office building was bought in January 1, 2017 by DeeDee and DeeDee plans to use the building for 40 years with no estimated salvage value. DeeDee depreciates the building on a straight line basis. i. DeeDee uses the DDB method to depreciate office equipment. No office equipment was added during 2019. It is estimated that the office equipment has a useful life of 20 years with a salvage value of $4,000. Prior depreciation was correctly calculated based on period of time held. j. As of 12/31/2019 the Available for Sale Equity Investments have a fair value of $385,000 and the fair value of the Available for Sale Debt Investments have a fair value of $110,000. Due to the market conditions, the company does not plan on selling the assets in 2020, but their intent is to sell at some point in time... You can ignore the tax effect on unrealized gains and losses...(Hint: Unrealized Gains and Losses - OCI are closed to Accumulated Other Comprehensive Income at the end of the year.) k. On March 1, 2019 (enter your birthday month), DeeDee purchased the copyrights of some accounting games for $100,000. They believe the useful life will be five years. The company's amortization policy is that amortization should be calculated based on partial year if an acquisition is made during the year. Internally, DeeDee also developed some new accounting games and capitalized $50,000 of research and development costs in the copyright account. 1. Office salaries and sales salaries for the last week of 2019 of $15,800 and $25,400 remained unpaid at 12/31/19 and have not been accrued. The employer portion of FICA expense is 7.65% and no employee has reached the maximum... DeeDee records payroll tax expenses in salary expense. m. On April 1, 2019, DeeDee rented a portion of one store to Marketing Majors Inc. The contract was for 18 months and DeeDee required all of the cash up front. The rent is being earned equally each month. This is the only item in which rent is being earned by the company. DeeDee Double Entry has a loan outstanding as of 12/31/2019. Interest is paid annually on January 1st. The facts for the loan is: Coldstar Bank Loan outstanding all of 2019 with a 5.2% interest rate. Interest is due on January 1st of each year. Principle is due in five years on January 1, 2024. Since interest will not be paid to the Bank until January 1st DeeDee's office staff did not accrue any interest. 0. DeeDee uses the FIFO Inventory Method in valuing inventory. The inventory balance of $372,500 was based on a physical count at 12/31/2013. Based on your analysis, you have noted that $4,500 of marketing games that belonged to Marketing Majors Inc. and being held by DeeDee on consignment was included in the physical account at year end. You also note that goods were in transit from a vendor on December 31, 2019 and were not included in ending inventory... The cost of the inventory was $16,200 and the goods were shipped f.o.b. shipping point on December 29, 2019. p. DeeDee has been authorized to issue 1,000,000 shares of $1 par Common Stock. At the end of 2018, they had issued 50,000 shares for $25.. They had properly accounted for this issuance. On January 2, 2019, they issued an additional 30,000 shares of Common Stock for $25 per share. The previous account recorded this transaction as a debit to Cash for $750,000 and a credit to Common Stock $750,000 4. DeeDee has a straight tax rate of 28% Income tax expense is Net Income before taxes times 28%... (Hint: Prepare the Income Statement up to Net Income before Taxes and then record this adjusting journal entry.)