How to adjust the trial balance? I have done the inventory part and got stuck.

Hawk Machinery Corp Trial Balance 31/12/19 CR ref Adjustments DR CR CR Unadjusted DR 158,985 61,159 r ef B-1 Adjusted DR 158,985 61,159 8,279 8,279 11,100 11,100 E-1 2843 E-1 342,173 2,215 66,000 48,000 78,742 1,758 20,842 339,330 2,215 66,000 48,000 78,742 1,758 20,842 Checking account Accounts Receivable Allowance for uncollectible accounts Note Receivable Interest receivable Inventory Prepaid Insurance Federal tax deposits (income) US Treasury bills (0-60 days) Investments, available for sale Fair value adjustment, investments Investments in bonds Bond premium Land Buildings Machinery & Equipment Furniture & Fixtures Vehicles Accumulated depreciation Sinking Fund (remediaton) Goodwill Cash surrender value - officer life insurance Accounts payable Note payable Interest payable Accrued payroll payable Accrued benefits payable Accrued taxes, state & local Deferred tax liability 40,500 670,500 434,892 30,629 45,264 40,500 670,500 434,892 30,629 45,264 326,404 326,404 50,255 22,165 23,150 50,255 22,165 23,150 36,075 75,000 36,075 75,000 48,950 6,745 1,140 54,030 48,950 6,745 1,140 54,030 7,971 502,289 50,000 50,000 235,000 99,742 7,971 502,289 50,000 50,000 235,000 99,742 2,544 16,000 2,500 2,544 16,000 2,500 2,222,295 2,222,295 36,395 36,395 E-1 403630 422,133 422133 21,346 E-1 21346 Accrued property tax Mortgage payable Sustainability liability Preferred Stock, $100 par, 5% Common stock Retained earnings Treasury stock Common stock dividends Preferred stock dividends Sales Sales returns & allowances Cost of goods sold Purchases Purchase discounts & allowances Factory wages Overhead allocation - COGS Depreciation Advertising Bad debt expense Officer life insurance expense Office salaries Sales compensation Officer's compensation Retirement benefits Utilities Warranty expense Office supplies and expense Bond amortization expense Interest expense Legal & accounting expense Travel expense Health care benefits State & local tax expense Federal income tax Property tax expense 149,613 424,441 52,713 25,815 3,923 2,573 82,392 91,703 126,000 10,000 9,720 8,252 5,115 9,717 21,627 12,500 6,850 20,700 12,540 60,064 8,000 42,692 149,613 424,441 52,713 25,815 3,923 2,573 82,392 91,703 126,000 10,000 9,720 8,252 5,115 9,717 21,627 12,500 6,850 20,700 12,540 60,064 8,000 8,000 25,491 8,000 25,491 Property tax expense Payroll tax expense Environmental remediation expense Interest income Dividend income Storage fees earned Scrap fees earned Unrealized gain on securities Gain on sale of equipment 12,409 5,210 18,000 411 1,758 17,288 12,409 5,210 18,000 411 1,758 17,288 3,757,650 3,800,342 424,976 424,976 3,375,366 3,778,996 | NET INCOME 670.440 1,028,535 B C D E 2 3 Hawk Machinery Corp Cash accounts 31/12/19 5 6 All bank accounts were reconciled. 7 9 A 1 Hawk Machinery Corp Accounts receivable 31/12/19 7 8 9 A review of sales contracts showed the following: Rocky Mountain's contract in the amount of $25,000 called for five batch deliveries over the course of the 5-month contract. The contract date was 10/1/2019 and deliveries were made on November 1, December 1, and December 31. The full contract amount was initially recorded as sales revenue. Payment is due when goods are received. 11 12 13 14 1 2 3 Hawk Machinery Corp Allowance for uncollectible accounts 31/12/19 A summary of the AR Aging summary appears below (before adjustments from the contract review): 5 6 7 Days Total, unadjusted Estimated unicollectible 0-30 43,000 3% 31-90 9,800 15% 91-120 6,000 40% over 120 2,359 100% 10 11 12 The company uses the percent of sales method during the monthly financial reporting and switches to the aging of receivables method at year end. 13 14 15 16 17 1 2 3 Hawk Machinery Corp Note receivable 31/12/19 6 7 8 On October 1, a customer converted an account balance into a note. Hawk Machinery Corp. charges 8% on open balances. The note is due January 2, 2020. 10 11 12 13 14 TCTDT ET FIG 1 Hawk Machinery Corp Trial Balance 31/12/19 3 7 Hawk hired an inventory service company to count the inventory in the 8 warehouse. The physical count reported was $339,330. 9 10 il Actual balance 339330 12 Book balance 342173 13 Adjustment -2843 14 15 Cost of good sold A1 2843 16 Inventory 2843 17 18 Bee. Inventory 342173 19 Purchase Al 422133 20 P Disc & Allowance -21346 21 Goods Available 742960 22 Ending Inventory 339330 Ai 23 COGS 403630 24 25 26 Ai A 1 Hawk Machinery Corp Trial Balance 31/12/19 3 The following information was collected from the Investments file: 5 6 7 The 12/31/2019 market value of investments held as available for sale: $104,650. Hawk purchased a $20,000 5-year bond paying 7% annually on the open market on 10 July 1, 2019 when the market price for similar bonds was 6%. The bookkeeper 11 recorded the bond at purchase price. 12 13 14 15 16 17 18 19 . 2 Hawk Machinery Corp Plant, Property & Equipment 31/12/19 8 In mid-December, the company switched to a delivery service and sold the truck. The bookkeeper recorded the sales price as gain on sale of equipment. 10 11 12 13 14 15 16 17 18 19 20 On 3/1/2019 the company bought an additional piece of equipment for $134,892. The 21 company uses straight-line depreciaiton, a 10-year life, and 20% salvage value. 22 23 1 2 3 Hawk Machinery Corp Trial Balance 31/12/19 Depreciable Basis Depreciation Expense 2018 Balance 2019 Balance 5 Method Life Cost Salvage 6 COGS SL 10 15/07/16 15/07/16 60,000 105,125 300,000 420,500 240,000 315,375 24,000 8,087 58,000 19,542 SL 39 720,500 165,125 32,087 77,542 8 Machinery 9 Factory Bldg 10 11 COGS Depreciation 12 13 General & Admin 14 15 Office Building 16 Office F&F 17 Truck 18 19 Total Gen & Admin SL 39 62,500 15/06/16 15/06/16 01/07/16 SL 250,000 30,629 45,264 187,500 30,629 36,211 4,808 4,376 7,242 12,019 10,939 18,106 SL 5 9,053 325,893 16,426 196,149 20 1,046,393 48,512 21 Total PP&E 22 23 1 2 3 Hawk Machinery Corp Notes payable 31/12/19 5 6 7 On May 1, 2019 the company borrowed $75,000 during their bank's promotion period at a rate of 2.5% and invested the money in their stock portfolio 9 10 11 12 13 14 15 16 17 18 19 20 21 The company refinanced its mortgage note (balance and refi fees = $535,000) on the building on January 2, 2019 at 3.4% for 25 years. Create an amortization schedule to prove balance and interest expense: The first payment on the new note was due 2/1/2019. 1 2 3 Hawk Machinery Corp Deferred Tax Liability 31/12/19 5 6 7 8 The corporation took advantage of Section 179 expensing in 2016 and completely depreciated the equipment and furniture/fixtures. Calculate the required balance in the DTL for 2016 and 2019 purchases. Assume the machinery bought in 2019 will also be expensed (fully written off) under the tax rules. 9 10 2017 2018 2019 11 12 13 14 Tax depreciation 15 Book depreciation 16 Difference 17 Tax rate 18 DTL 10 2016 375,893 21,582 354,311 0.35 48,512 (48,512) 0.21 48.512 (48,512) 0.21 Hawk Machinery Corp Income tax 31/12/19 Income per book 7 8 Permanent differences 10 11 12 13 Temporary differences 14 15 16 17 Taxable income 18 Tax rate 19 Income tax 20 21 Hawk Machinery Corp Trial Balance 31/12/19 CR ref Adjustments DR CR CR Unadjusted DR 158,985 61,159 r ef B-1 Adjusted DR 158,985 61,159 8,279 8,279 11,100 11,100 E-1 2843 E-1 342,173 2,215 66,000 48,000 78,742 1,758 20,842 339,330 2,215 66,000 48,000 78,742 1,758 20,842 Checking account Accounts Receivable Allowance for uncollectible accounts Note Receivable Interest receivable Inventory Prepaid Insurance Federal tax deposits (income) US Treasury bills (0-60 days) Investments, available for sale Fair value adjustment, investments Investments in bonds Bond premium Land Buildings Machinery & Equipment Furniture & Fixtures Vehicles Accumulated depreciation Sinking Fund (remediaton) Goodwill Cash surrender value - officer life insurance Accounts payable Note payable Interest payable Accrued payroll payable Accrued benefits payable Accrued taxes, state & local Deferred tax liability 40,500 670,500 434,892 30,629 45,264 40,500 670,500 434,892 30,629 45,264 326,404 326,404 50,255 22,165 23,150 50,255 22,165 23,150 36,075 75,000 36,075 75,000 48,950 6,745 1,140 54,030 48,950 6,745 1,140 54,030 7,971 502,289 50,000 50,000 235,000 99,742 7,971 502,289 50,000 50,000 235,000 99,742 2,544 16,000 2,500 2,544 16,000 2,500 2,222,295 2,222,295 36,395 36,395 E-1 403630 422,133 422133 21,346 E-1 21346 Accrued property tax Mortgage payable Sustainability liability Preferred Stock, $100 par, 5% Common stock Retained earnings Treasury stock Common stock dividends Preferred stock dividends Sales Sales returns & allowances Cost of goods sold Purchases Purchase discounts & allowances Factory wages Overhead allocation - COGS Depreciation Advertising Bad debt expense Officer life insurance expense Office salaries Sales compensation Officer's compensation Retirement benefits Utilities Warranty expense Office supplies and expense Bond amortization expense Interest expense Legal & accounting expense Travel expense Health care benefits State & local tax expense Federal income tax Property tax expense 149,613 424,441 52,713 25,815 3,923 2,573 82,392 91,703 126,000 10,000 9,720 8,252 5,115 9,717 21,627 12,500 6,850 20,700 12,540 60,064 8,000 42,692 149,613 424,441 52,713 25,815 3,923 2,573 82,392 91,703 126,000 10,000 9,720 8,252 5,115 9,717 21,627 12,500 6,850 20,700 12,540 60,064 8,000 8,000 25,491 8,000 25,491 Property tax expense Payroll tax expense Environmental remediation expense Interest income Dividend income Storage fees earned Scrap fees earned Unrealized gain on securities Gain on sale of equipment 12,409 5,210 18,000 411 1,758 17,288 12,409 5,210 18,000 411 1,758 17,288 3,757,650 3,800,342 424,976 424,976 3,375,366 3,778,996 | NET INCOME 670.440 1,028,535 B C D E 2 3 Hawk Machinery Corp Cash accounts 31/12/19 5 6 All bank accounts were reconciled. 7 9 A 1 Hawk Machinery Corp Accounts receivable 31/12/19 7 8 9 A review of sales contracts showed the following: Rocky Mountain's contract in the amount of $25,000 called for five batch deliveries over the course of the 5-month contract. The contract date was 10/1/2019 and deliveries were made on November 1, December 1, and December 31. The full contract amount was initially recorded as sales revenue. Payment is due when goods are received. 11 12 13 14 1 2 3 Hawk Machinery Corp Allowance for uncollectible accounts 31/12/19 A summary of the AR Aging summary appears below (before adjustments from the contract review): 5 6 7 Days Total, unadjusted Estimated unicollectible 0-30 43,000 3% 31-90 9,800 15% 91-120 6,000 40% over 120 2,359 100% 10 11 12 The company uses the percent of sales method during the monthly financial reporting and switches to the aging of receivables method at year end. 13 14 15 16 17 1 2 3 Hawk Machinery Corp Note receivable 31/12/19 6 7 8 On October 1, a customer converted an account balance into a note. Hawk Machinery Corp. charges 8% on open balances. The note is due January 2, 2020. 10 11 12 13 14 TCTDT ET FIG 1 Hawk Machinery Corp Trial Balance 31/12/19 3 7 Hawk hired an inventory service company to count the inventory in the 8 warehouse. The physical count reported was $339,330. 9 10 il Actual balance 339330 12 Book balance 342173 13 Adjustment -2843 14 15 Cost of good sold A1 2843 16 Inventory 2843 17 18 Bee. Inventory 342173 19 Purchase Al 422133 20 P Disc & Allowance -21346 21 Goods Available 742960 22 Ending Inventory 339330 Ai 23 COGS 403630 24 25 26 Ai A 1 Hawk Machinery Corp Trial Balance 31/12/19 3 The following information was collected from the Investments file: 5 6 7 The 12/31/2019 market value of investments held as available for sale: $104,650. Hawk purchased a $20,000 5-year bond paying 7% annually on the open market on 10 July 1, 2019 when the market price for similar bonds was 6%. The bookkeeper 11 recorded the bond at purchase price. 12 13 14 15 16 17 18 19 . 2 Hawk Machinery Corp Plant, Property & Equipment 31/12/19 8 In mid-December, the company switched to a delivery service and sold the truck. The bookkeeper recorded the sales price as gain on sale of equipment. 10 11 12 13 14 15 16 17 18 19 20 On 3/1/2019 the company bought an additional piece of equipment for $134,892. The 21 company uses straight-line depreciaiton, a 10-year life, and 20% salvage value. 22 23 1 2 3 Hawk Machinery Corp Trial Balance 31/12/19 Depreciable Basis Depreciation Expense 2018 Balance 2019 Balance 5 Method Life Cost Salvage 6 COGS SL 10 15/07/16 15/07/16 60,000 105,125 300,000 420,500 240,000 315,375 24,000 8,087 58,000 19,542 SL 39 720,500 165,125 32,087 77,542 8 Machinery 9 Factory Bldg 10 11 COGS Depreciation 12 13 General & Admin 14 15 Office Building 16 Office F&F 17 Truck 18 19 Total Gen & Admin SL 39 62,500 15/06/16 15/06/16 01/07/16 SL 250,000 30,629 45,264 187,500 30,629 36,211 4,808 4,376 7,242 12,019 10,939 18,106 SL 5 9,053 325,893 16,426 196,149 20 1,046,393 48,512 21 Total PP&E 22 23 1 2 3 Hawk Machinery Corp Notes payable 31/12/19 5 6 7 On May 1, 2019 the company borrowed $75,000 during their bank's promotion period at a rate of 2.5% and invested the money in their stock portfolio 9 10 11 12 13 14 15 16 17 18 19 20 21 The company refinanced its mortgage note (balance and refi fees = $535,000) on the building on January 2, 2019 at 3.4% for 25 years. Create an amortization schedule to prove balance and interest expense: The first payment on the new note was due 2/1/2019. 1 2 3 Hawk Machinery Corp Deferred Tax Liability 31/12/19 5 6 7 8 The corporation took advantage of Section 179 expensing in 2016 and completely depreciated the equipment and furniture/fixtures. Calculate the required balance in the DTL for 2016 and 2019 purchases. Assume the machinery bought in 2019 will also be expensed (fully written off) under the tax rules. 9 10 2017 2018 2019 11 12 13 14 Tax depreciation 15 Book depreciation 16 Difference 17 Tax rate 18 DTL 10 2016 375,893 21,582 354,311 0.35 48,512 (48,512) 0.21 48.512 (48,512) 0.21 Hawk Machinery Corp Income tax 31/12/19 Income per book 7 8 Permanent differences 10 11 12 13 Temporary differences 14 15 16 17 Taxable income 18 Tax rate 19 Income tax 20 21