I need help with my Accounting problems ASAP.

I need to make Adjust journal entries, trial balance and correct balance sheet with the files I attached.

ACCOUNTING 450/550 Review Project This is an individual assignment. You may confer with one another, but remember that conferring does not mean allowing others to just copy your work. Everyone should be working hard on this! Both parts are due at midnight on the respective days and upload a pdf submission to Canvas. Due: Friday 4/8/16 Part 1: Adjusting entries, 12/31/15 adjusted trial balance and corrected 12/31/14 balance sheet. Due: Friday 4/15/16: Part 2: Using the solution to part 1 which will be made available after part 1 is turned in on blackboard, you are to prepare the comprehensive statement of income, statement of stockholders' equity, statement of cash flows, balance sheet; all in proper form Assume all errors are material. Both parts must be typed in 10 or 12 font. NOTE: Important! Make a copy of your solution. The solution to the problem will be posted on Canvas after you turn in the project. Purpose of this assignment: 1. Review the adjustment/correction process including sophisticated topics from accounting 350/351/352 2. Prepare all of the financial statements in proper form. These are foundational to this course and your career as accountants. Setting: You have been hired by Dillard to prepare adjusting entries and financial statements for 2015. Previously Rinky Dink Accounting had been performing such tasks. Ignore tax effects The trial balance at 12/31/15 before you work your magic and the balance sheet at 12/31/14 are included in a separate excel file. 1 1. The investments account at 12/31/15 contains stocks that were all purchased during 2014. In discussions with the CFO, you determine that they were made to invest excess cash. The company expects that they will need the cash within the next year. Here is information that you gather regarding that portfolio (in 000's): Company DAG GLS HRG Initial Investment Cost $500 50 90 Market Value at 12/31/15 Market Value at 12/31/14 $440 $490 55 60 78 100 You also discuss with the CFO the Investment in Sammy Corporation. You discover that this Investment was first made 3 years ago on 1/1/13 and that the investment cost was $1,000,000. The investment in 35% of the voting stock of Sammy was made in order to be able to have representation on its board since Sammy is a key supplier of the inventory that Dillard sells. Dillard wants to have a say in the quality control and other decisions that Sammy makes. You dig around and realize that the $1,000,000 investment cost was exactly equal to 35% of the book value of equity of Sammy on 1/1/13. You also determine that Dillard has been recording dividend revenue when it receives payment. During 2013, Dillard received $30,000 in dividends, in 2014 $30,000 and in 2015, $35,000. Sammy has reported income during 2013, 2014 and 2015 of $300,000, $360,000 and $400,000 respectively. On 1/1/12, Dillard purchased 300, $1,000 face 8% Bullwinkle Moose Corporation bonds, interest paid semi-annually on 7/1 and 12/31, with a maturity term of 15 years. The purchase price was $275,567. 2. You discover that Dillard bought and installed equipment for $300,000 on 1/1/09. The equipment's use will result in environmental damage that will need to be cleaned up when the equipment is retired. The estimated life of the equipment is 15 years on 1/1/09. The environmental clean-up cost is estimated to be $30,000. The $30,000 will all be paid at the end of the equipment's life. You notice that the equipment was expensed when originally purchased. A discount rate of 6% is reasonable discount rate for the clean-up cost. Straight-line with no salvage value is appropriate. 3. The company uses the percentage of accounts receivable method and historically does not collect 6% of its ending accounts receivable. 4. The company has been recording warranty expense as it has been paid. The company first warranted its products, 4 years ago, beginning 1/1/12. Warranty costs paid by year are listed below: Year Warranty costs paid 2012 $5,000 2 2013 2014 2015 $10,000 $12,000 $14,000 After exploring the timing of sales during the year and what seems like the company will pay given experience, you compute the following warranty liabilities at each year -end. Original Sale year 2012 2013 2014 2015 Estimated liability @12/31/12 $3,000 Estimated liability at 12/31/13 $1,000 $5,000 Estimated liability at 12/31/14 0 $1,000 7,000 Estimated liability at 12/31/15 0 0 2,500 7,000 5. In 2015, you discover that an equipment costing $300,000 purchased on 7/1/12 which actually had zero salvage value and a 5 year life has been depreciated using straight-line assuming a 5 year life, but $30,000 salvage value. This was a mistake, no change in estimate has occurred. 2015 depreciation had been recorded before this error was discovered. 6. Additional information: Dillard purchased equipment for $600,000 cash this year. This transaction was properly recorded. 7. You discover that the ending inventory for 2013, 2014 and 2015 were all wrong. This is first detected by you this year. Inventory on 12/31/13 was understated by $300,000, on 12/31/14 overstated by $120,000 and on 12/31/15 understated by $40,000. These appear to be independent errors. 8. The 10-year $1,000,000, 6% note payable was issued on 5/1/10 and pays interest on 4/30 and 10/31 each year. 9. On 1/1/14, Dillard leased equipment from Shady Peeps. The lease term is 10 years and the estimated economic life to the equipment is 12. The lease payments were made on 1/1/14 and then 12/31/14 and 12/31/15 (the payments are due on 12/31 each of the following years). There is guaranteed residual value is $20,000. The payments are $23,000 each. An appropriate interest rate is 6%. 10.You notice that in 2014 Dillard reduced Retained Earnings by $65,000 due to the repurchase of common stock. The stock has not been resold or retired. 3 11. You discover that Dillard has been paying $50,000 at the end of each year (2013 through 2015) into a pension fund for its employees. On 1/1/13, the company paid $25,000 into the fund. Upon further investigation you realize that this is a defined benefit plan established in 2013. The Projected Benefit Obligation on 1/1/13 was $60,000 which is the amount granted for prior service to long-term employees. The average remaining service life of these employees was 10 years on 1/1/13. The service cost for 2013, 2014 and 2015 was $75,000 in each year. The discount rate for the obligation is estimated to be 6% and the expected return on the pension assets is 5%. During 2013, the fund fair value balance at the end of 2013 was $82,000, at the end of 2014 was $125,000 and at the end of 2015 was $185,000. No benefits have been paid since 2013. 12. A trademark was sold during 2015 at book value. 4 Cash Investments Accounts Receivable Allowance for Doubtful Accts Inventory Prepaid Rent Land Building Equipment Accumulated Depreciation Goodwill Investment in Sammy Corporation Investment in Moose Bonds Accounts Payable Notes Payable Common stock Retained Earnings Treasury stock Cash Dividends Stock Dividends Sales Sales Returns & Allowances Dividend Revenue Cost of Goods Sold Salaries Expense Interest Expense Depreciation Expense Warranty Expense Rent Expense Pension Expense Trademark Loss on sale of equipment Interest Revenue Trademark Amortization Expense DR 144,300 640,000 400,000 10,000 600,000 23,000 807,000 800,000 1,000,000 CR 300,000 40,000 1,000,000 275,567 400,000 1,000,000 430,000 3,118,034 90,000 35,000 40,000 2,325,748 150,000 64,000 899,915 304,000 60,000 130,000 14,000 23,000 50,000 82,000 35,000 24,000 9,000 7,661,782 7,661,782 Cash Investments Accounts Receivable Allowance for Doubtful Accounts Inventory 137,667 640,000 350,000 28,000 Prepaid Rent 23,000 Investment in Sammy Corporation Investment in Moose Bonds Land Building Equipment Accumulated Depreciation Goodwill Trademark Total Assets Accounts Payable Notes Payable Common stock Retained earnings 322,000 400,000 1,000,000 275,567 607,000 800,000 850,000 (250,000) 1,400,000 40,000 112,500 4,957,734 739,700 1,000,000 100,000 3,118,034 4,957,734