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In red or blank space need answer thanks Current Attempt in Progress You have been assigned to examine the financial statements of Metlock Company for
In red or blank space need answer thanks
Current Attempt in Progress You have been assigned to examine the financial statements of Metlock Company for the year ended December 31, 2020. You discover the following situations. 1. Depreciation of $3,500 for 2020 on delivery vehicles was not recorded. 2. The physical inventory count on December 31, 2019, improperly excluded merchandise costing $17,700 that had been temporarily stored in a public warehouse. Metlock uses a periodic inventory system. 3. A collection of $6,100 on account from a customer received on December 31, 2020, was not recorded until January 2, 2021. 4. In 2020, the company sold for $4,100 fully depreciated equipment that originally cost $23,600. The company credited the proceeds from the sale to the Equipment account. 5. During November 2020, a competitor company filed a patent-infringement suit against Metlock claiming damages of $241,600. The company's legal counsel has indicated that an unfavorable verdict is probable and a reasonable estimate of the court's award to the competitor is $136,000. The company has not reflected or disclosed this situation in the financial statements. 6. Metlock has a portfolio of trading investments. No entry has been made to adjust to market. Information on cost and fair value is as follows. Cost Fair Value December 31, 2019 $101,200 $101,200 December 31, 2020 $92,000 $90,000 7. At December 31, 2020, an analysis of payroll information shows accrued salaries of $13,300. The Salaries and Wages Payable account had a balance of $15,600 at December 31, 2020, which was unchanged from its balance at December 31, 2019. 8. A large piece of equipment was purchased on January 3, 2020, for $42,800 and was charged to Maintenance and Repairs Expense. The equipment is estimated to have a service life of 8 years and no residual value. Metlock normally uses the straight-line depreciation method for this type of equipment. 9. A $12,600 insurance premium paid on July 1, 2019, for a policy that expires on June 30, 2022, was charged to insurance expense. 10. A trademark was acquired at the beginning of 2019 for $51,100. No amortization has been recorded since its acquisition. The maximum allowable amortization period is 10 years. 1. Depreciation Expense 3500 accumulated depreciation 3500 2. Cost of Goods Sold 17,000 Retained Earnings 17,000 3. Cash 6100 Accounts Receivable 6100 4. Accumulated Depreciation-Buildings 23600 Equipment Gain on Disposal of Plant Assets 5. Loss Due to Market Decline of Inventory Lawsuit Liability 6. Unrealized Holding Gain or Loss-Equity Fair Value Adjustment 7. Salaries and Wages Payable Salaries and Wages Expense 8. Equipment Depreciation Expense Maintenance and Repairs Expense Amortization Expense 9. Prepaid Insurance Insurance Expense Retained Earnings 10. Amortization Expense 10. Amortization Expense - Retained Earnings TrademarksStep by Step Solution
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