Falcon Corporation (Falcon) sells designer backpacks with logos of various college and university teams and organizations Falcon started its business on January 1, 2017 Falcon ran its operations for the calendar year 2019 and its accountant, Flex, compiled an unadjusted trial balance of account information as of December 31, 2019 (see materials below Unadjusted Trial Balance information) In order to complete Falcons 2019 financial results, Flex needs to adjust these trial balance numbers by preparing any adjusting journal entries that are needed when he prepares Falcons books and financial statements for the year end Board of Directors meeting Flex has received information from discussions with department managers and various materials he has gathered (see materials below Business Information List) Flexs mission is as follows (and he needs your assistance) For each item on the Business Information List, determine the following Does a transaction exist If YES, prepare the adjusting journal entry Flex would need to record for Falcon at December 31, 2019 If NO, write no transaction and explain why there is no adjusting journal entry to record at December 31, 2019 Falcon did not receive its bill for the month of December 2019 from its law firm Flex estimated that the bill would arrive in January 2020 and total $20,000 per month Falcon signed a contract with a customer, Ohio State for Buckeye backpacks for the 2020 2021 school year for $30,000 The contract was signed on December 3, 2019, but delivery of the backpacks will not occur until April 2020 Falcon entered into an agreement on July 1, 2019 with a customer, Michigan for backpacks to give away to sports fans in the fall Michigan paid Falcon the full contract value of $20,000 when the contract was signed Flex noticed that the backpacks were delivered to Michigan and the related inventory entry was made, however, the matching revenue was not recorded Falcon rented a truck to park at Bentley football games in the fall and market its backpacks with logos to sports fans The truck rental was for the months of September 2019 through January 2020 for a total of $5,000, which Falcon paid in September Flex counted the supplies left in the supply closet and found that $1,000 of supplies were left as of the end of the year Falcon paid and recorded its annual corporate liability insurance policy for $27,000 on November 1, 2019 to Safety Insurance This is the only insurance Falcon has and the amount they paid is shown on the unadjusted trial balance Falcon purchased a logo printing machine on April 1, 2019 for $65,000 Flex noticed that depreciation was never recorded during 2019 The logo printing machine has an estimated life of 5 years and a salvage value of $5,000 Falcon pays its employees $100,000 per week on every Friday for the current five day work week Flex looked at the calendar and saw that December 31, 2019 was on a Tuesday Falcon did not receive its utility bill for the month of December Flex looked at the historical amounts and the utility bill averages $1,000 per month Falcon called its backpack supplier, Dora, Inc and ordered $50,000 of backpacks Dora said with the holiday rush, she would not be able to ship the backpacks until January 7, 2020 Falcons note payable incurs interest at a 9 annual rate Falcon entered into its two notes payable agreements on August 1, 2019 Interest is payable on the respective due dates of each notes payable No interest expense has been recorded for 2019 Flex estimates the income tax expense for Falcon was $20,000 and this was not yet recorded for 2019 Falcon had an arrangement with a customer, Wildcat, Inc (Wildcat) who received payment terms of 2 10, net 30 On December 28, 2019, Falcon sold $10,000 of backpacks to Wildcat, which was recorded Wildcat informed Falcon that the company intended to pay within 10 days BUSINESS INFORMATION LIST (continued) Flex forgot to record a backpack sale on account of $20,000 to customer, University of NH and related inventory entry of $12,000 sold on December 30, 2019

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Falcon Corporation (Falcon) sells designer backpacks with logos of various college and university teams and organizations. Falcon started its business on January 1, 2017. Falcon

Falcon Corporation (Falcon) sells designer backpacks with logos of various college and university teams and organizations. Falcon started its business on January 1, 2017.

Falcon ran its operations for the calendar year 2019 and its accountant, Flex, compiled an unadjusted trial balance of account information as of December 31, 2019 (see materials below Unadjusted Trial Balance information).

In order to complete Falcons 2019 financial results, Flex needs to adjust these trial balance numbers by preparing any adjusting journal entries that are needed when he prepares Falcons books and financial statements for the year-end Board of Directors meeting.

Flex has received information from discussions with department managers and various materials he has gathered (see materials below Business Information List).

Flexs mission is as follows (and he needs your assistance):

For each item on the Business Information List, determine the following: Does a transaction exist?
- If YES, prepare the adjusting journal entry Flex would need to record for Falcon at December 31, 2019.
- If NO, write no transaction and explain why there is no adjusting journal entry to record at December 31, 2019.

Falcon did not receive its bill for the month of December 2019 from its law firm. Flex estimated that the bill would arrive in January 2020 and total $20,000 per month.

Falcon signed a contract with a customer, Ohio State for Buckeye backpacks for the 2020-2021 school year for $30,000. The contract was signed on December 3, 2019, but delivery of the backpacks will not occur until April 2020.

Falcon entered into an agreement on July 1, 2019 with a customer, Michigan for backpacks to give away to sports fans in the fall. Michigan paid Falcon the full contract value of $20,000 when the contract was signed. Flex noticed that the backpacks were delivered to Michigan and the related inventory entry was made, however, the matching revenue was not recorded.

Falcon rented a truck to park at Bentley football games in the fall and market its backpacks with logos to sports fans. The truck rental was for the months of September 2019 through January 2020 for a total of $5,000, which Falcon paid in September.

Flex counted the supplies left in the supply closet and found that $1,000 of supplies were left as of the end of the year.

Falcon paid and recorded its annual corporate liability insurance policy for $27,000 on November 1, 2019 to Safety Insurance. This is the only insurance Falcon has and the amount they paid is shown on the unadjusted trial balance.

Falcon purchased a logo printing machine on April 1, 2019 for $65,000. Flex noticed that depreciation was never recorded during 2019. The logo printing machine has an estimated life of 5 years and a salvage value of $5,000.

Falcon pays its employees $100,000 per week on every Friday for the current five day work week. Flex looked at the calendar and saw that December 31, 2019 was on a Tuesday.

Falcon did not receive its utility bill for the month of December. Flex looked at the historical amounts and the utility bill averages $1,000 per month.

Falcon called its backpack supplier, Dora, Inc. and ordered $50,000 of backpacks. Dora said with the holiday rush, she would not be able to ship the backpacks until January 7, 2020.

Falcons note payable incurs interest at a 9% annual rate. Falcon entered into its two notes payable agreements on August 1, 2019. Interest is payable on the respective due dates of each notes payable. No interest expense has been recorded for 2019.

Flex estimates the income tax expense for Falcon was $20,000 and this was not yet recorded for 2019.

Falcon had an arrangement with a customer, Wildcat, Inc. (Wildcat) who received payment terms of 2/10, net 30. On December 28, 2019, Falcon sold $10,000 of backpacks to Wildcat, which was recorded. Wildcat informed Falcon that the company intended to pay within 10 days.

BUSINESS INFORMATION LIST (continued)

Flex forgot to record a backpack sale on account of $20,000 to customer, University of NH and related inventory entry of $12,000 sold on December 30, 2019.