Comprehensive Problem 3 5. Total assets, $3,569,290 General Ledger Selected transactions completed by Kornett Company during its first fiscal year ended December 31, 20Y8, 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 receipts: office supplies, $1,680, miscellaneous selling expense, $570; miscella- neous administrative expense, $880. (edit Apr. 14. Purchased $31.300 of merchandise on account, terms, n/30. The perpetual in ventory system is used to account for inventory May 13. Paid the invoice of April 14. 17. Received cash from daily cash sales for $21,200. The amount indicated by the cash register was $21,240. June 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. The allowance method is used in accounting for uncollectible receivables.) Sept. 15. Reinstated the Finley account written off on August 24 and received $1,400 cash in full payment 15. Purchased land by issuing a $670,000, 90-day note to Zahorik Co., which discounted it at 9%. Oct. 17. Sold office equipment in exchange for $135,000 cash plus receipt of a $100,000, 90-day, 9% note. The equipment had a cost of $320,000 and accumulated depreciation of $64,000 as of October 17. (Continued) 580 Chapter 3.184 65.000 5,000 Now Journalized the monthly payroll for November, based on the following data Salaries Deductions Sales salaries $135.000 Income tax withheld 5.266 Office salaries 77.250 Social security tax withheld 5212250 Medicare tax withheld Unemployment tax rates State unemployment Federal unemployment 06 Amount subject to unemployment taxes State unemployment Federal unemployment 30. Journalized the employer's payroll taxes on the payroll Dec. 14. Journalized the payment of the September 15 note at maturity, 31. The pension cost for the year was $190,400, of which 5139.700 was paid to the pension plan trustee. Instructions 1 Joumalize the selected transactions 2. Based on the following data, prepare a bank reconciliation for December of the current year: a. Balance according to the bank statement at December 31, $283,000, b. Balance according to the ledger at December 31, $245,410 c. Checks outstanding at December 31, 568,540. d Deposit in transit, not recorded by bank, $29,500 e Bank debit memo for service charges, $750. F. A check for $12.700 in payment of an invoice was incorrectly recorded in the accounts as $12,000 3. Hased on the bank reconciliation prepared in (2).journalize the entry or entries to be made by Kornett Company 4. Based on the following selected data, journalize the adjusting entries as of December 31 of the current year * Estimated uncollectible accounts at December 31, 516,000, based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts at December 31 was $2,000 (debit) b. The physical inventory on December 31 indicated an inventory shrinkage of $3.300. c Prepaid insurance expired during the year, $22,820 d. Office supplies used during the year, 53,920. Depreciation is computed as follows: Residual Acquisition Useful Life Depreciation Asset Cost Value Date in Years Method Used Buildings $900.000 5 0 January 2 50 Double-declining balance Olhos Equip 246,000 26,000 January 3 5 Straight-line Store Equip 112,000 12.000 July 1 10 Straight line . A patent costing $48,000 when acquired on January 2 has a remaining legal life of 10 years and is expected to have value for eight years. * The cost of mineral nights was $546,000. Of the estimated deposit of 910,000 tons of ore. 50,000 tons were mined and sold during the year Vacation pay expense for December, $10.500 product warranty was granted beginning December 1 and covering a one-year period. The estimated cost is of sales, which totaled $1,900,000 in December Interest was accrued on the note receivable received on October 17 Chapter 11 Current tables and Payron 581 5. Based on the following information and the post-dosing trial balance that follows prepare a balance sheet in report form a December 31 of the current yean The merchandise inventory is stated at cost by the LIFO method The product warranty payable is a current liability Vacation pay payable Current lubility 57.140 Long term liability 3,360 The unfunded pension liability is a long-term lubility Notes payable: Current liability 5 70,000 Long-term liability 630.000 Kornett Company Post-Closing Trial Balance December 31, 2018 Credit Balances Debit Balances 4,500 243,960 100.000 470.000 16.000 320.000 1.875 45,640 13,390 654,925 900.000 36.000 246,000 44,000 112.000 Petty Cash Cash Notes Receivable Accounts Recelvable. Allowance for Doubtful Accounts.. Merchandise Inventory Interest Receivable Prepaid Insurance..... Office Supplies Land Buildings Accumulated Depreciation-Buildings Office Equipment Accumulated Depreciation--Office Equipment Store Equipment Accumulated Depreciation ---Store Equipment. Mineral Rights Accumulated Depletion.. Patents Social Security Tax Payable Medicare Tax Payable Employees Federal Income Tax Payable State Unemployment Tax Payable Federal Unemployment Tax Payable Salaries Payable Accounts Payable Interest Payable Product Warranty Payable. Vacation Pay Payable Unfunded Pension Liability Notes Payable J. Kornett Capital 5,000 546,000 30.000 42,000 25.470 4.710 40.000 270 30 157.000 131,600 28.000 76.000 10.500 50,700 700,000 2,345,010 3.700,290 3,700.290