Bank Reconciliation (Arabesque) (10 points) Debussy LLC had a cash balance at the end of the year on their books of $442,000. Meanwhile the bank has a balance of $425,400 for the company. Using the following information, create a bank reconciliation which can account for the differences between the two balances. 1. Checks received by the company but not yet deposited in the bank totaled $25,000 2. A check from a customer which the company deposited bounced. The check was $3,000 and a bounced check fee of $30 was charged to the company. The company was unaware of the insufficient funds. 3. Interest accrued at the bank which was unrecorded by Debussy was $430 4. Bills of $4,000 were directly paid through a wire transfer at the bank and not recorded on Debussy's books yet. 5. Checks written by the company and given to customers but not yet deposited by the recipients totaled $15,000 Discounts (Mad Rush) (10 points) Philip Glass Inc. sells musical equipment and sold $80,000 worth of equipment on June 12th on account. To encourage payment, Glass typically offers cash discount terms of 1/10, n/30. Create the necessary journal entries for the sale and collection of payment assuming Glass uses the gross method and the customer pays on June 19th (5 points) Now assume that Glass uses the net method and payment occurs on June 19th. Create the necessary journal entries. Dollar Value LIFO Method (Piano Concerto No. 2) (26 points) Rachmaninoff Inc. uses the Dollar Value LIFO method to calculate ending inventory costs for their balance sheet. Using this method, determine the ending balance of inventory for 2020 to 2023. Cost Index to get back to Base Year Dollars Inventory Balance in Year of Count $500,000 $680,000 $750,000 $770,000 $850,000 1/1/2020 12/31/2020 12/31/2021 12/31/2022 12/31/2023 1.06 1.10 1.16 1.09 Revenue Recognition (Liebestraum) (28 points) Franz Liszt Corp is a construction company which in 2020 entered into a contract to produce a music hall for $13,500,000. Construction will take three years. Over the course of construction, the following events took place: 2020 2021 2022 Costs incurred in Year $4,858,500 $4,258,500 $3,475,000 Anticipated Costs to Completion $7,650,000 $3,600,000 $0 Billings in Year $4,000,000 $4,000,000 $5,500,000 Cash Collections in Year $3,800,000 $3,500,000 $6,200,000 Using this information: Calculate Revenues and Gross Profit for each of the three years (6 points) Create the necessary journal entries for 2020 (8 points) Determine the value of any contract assets or liabilities established in 2020 (2 points) Instead now, imagine the following events took place over the construction of the asset: Costs incurred in Year Anticipated Costs to Completion Billings in Year Cash Collections in Year 2020 $4,858,500 $7,650,000 $4,000,000 $3,800,000 2021 $4,258,500 $4,800,000 $4,000,000 $3,500,000 2022 $5,475,000 $0 $5,500,000 56,200,000 Create the necessary journal entries to recognize revenues only in each of the three years (12 points) Notes Receivable (Raindrop) (12 points) On January 1st of 2020 Chopin Corp provided services and in exchange recorded a note receivable for $200,000. The receivable will be paid on January 1st of 2024. Record the necessary journal entries in association with this transaction including the original receipt of the note assuming the company uses a 4% discount rate