In good form, complete the needed journal entries (appendix 2). If no journal entry is required, write down "no entry needed". July 31 will be assumed for all dates Appendix 1 Hanson Computers Trial Balance As at July 31 Account name DR CR Cash 163,050 Accounts Payable 15,254 Accounts receivable 32,000 Computer Inventory 5,000 Monitor Inventory 15,000 Mouse Inventory 6,000 repair equipment 95,000 Accumulated Amortization - repair equipment 19,000 diagnostic Equipment 350,000 Accumulated Amortization - diagnostic equipment 16,250 Good Will 120,000 Trademarks 25,000 Long-term loan payable 100,000 Current portion of Long-term loan payable 25,000 Note Receivable 60,000 Other Receivables 65,000 Note Payable 50,000 Income Tax Payable 97,830 Income Tax Expense 97,830 Amortization Expense Salaries Payable 45,000 Interest Revenue 29,349 Computer Revenue 1,580,488 COGS 650,000 Salary Expense 325,000 Rent expense - Prepaid rent expense 96,000 Insurance Expense Prepaid Insurance Expense 24,000 Utilities Expense 50,000 Office Supplies Inventory 5,000 Office Supplies Expense Retained Earnings 101,155 Common Shares 50 Accounting Expense 5,000 Unearned Revenue 95,000 2,188,880 2,188,880 Appendix 2 Other notes about the year end 1) www A deposit was made July 15th by a local school for $95,000 for custom computers. At July 31 Hanson Computers had fulfilled 50% of the contract. www 2) Discussions are under way to unionize the staff at the store. If it goes through it will increase the Salary expense by $15,000 3) No adjustment for Amortization or Depreciation has been done for the year end. Information is as follows: Repair Equipment, purchased last year, so this is year #2 (company used a full year Amortization in both years) Purchase price 95,000 Residual value 15,000 Depreciation method double declining Life 10 years Diagnostic Equipment Goodwill Purchase price 350,000 Residual value 25,000 Depreciation method straight-line Life 20 years Purchase price 120,000 Residual value- Depreciation method straight-line Life 15 years 4) Incorrectly included in the ending mouse inventory are $2,000 worth of mice that can't be used 5) Rent is paid in advance for the entire year. January 1st, the company paid $96,000 to the rental company for 12 months of rent More on next page 6) Insurance is paid June 1 for the next 12 months and was allocated to the pre-paid insurance account when purchased 7) A count of Office Supplies Inventory at July 31 showed $2,000 of supplies on hand 8) Interest revenue is from an investment the company has and is not part of the main business for the company. Appendix 3-Industry Average ratio's Industry Average Gross Profit Margin 50% Profit margin 15% Current Ratio 1.35 COGS % 50% Return on Assets 1.40 Working capital 75,000