Land adjusting entry carried from last year to update the opening balances in 2020. 1 1 mark mark Adjustment for prior year end's accumulated depreciation, income tax payable and retained earnings. Carried in 2020 to update 2019 opening balances. 2) 1 1 mark mark mark 1 Depreciation adjusting entry in 2020. 3) 2 2 mark mark Income tax expense adjustment due to (3) above in 2020. =) 2 2 mark mark Owner's transfer of land at fair value in 2020. 5) 2 2 mark mark Plugged in number to update the Retained Earnings as at December 31, 2020. Credit adjustment in 2020 Income Statement from entry (3) above : Debit adjustment in 2020 Income Statement from entry (4) above : Plugged in number to RE to show the effect of adjustments on net income: 1 1 mark mark 1 1 1 mark mark mark Accumulated depreciation balance at January 1, 2020: Depreciation charge for 2020: Would be accumulated deprec. balance at January 1, 2020: Accumulated depreciation balance given at December 31, 2020: Accumulated depreciation debit entry for the equipment sold in 2020: 1 1 mark mark 1 mark 1 mark Cost of the equipment sold: Building and equipment balance at January 1, 2020: Equipment purchased during the year-2020: Building and equipment's would be balance at December 31, 2020: Building and equipment's balance-given at December 31, 2020: Cost of the equipment sold: 1 1 mark mark Entry must have been made by the company regarding the equipment disposal-sale: Cash Accumulated depreciation of the equipment sold Cost of the equipment Gain from sale of the equipment 1 1 1 1 32 mark mark mark mark marks 0 o MC TRAVEL INC. Balance Sheet December 31, $ 2020 Adjustments DR CR Restated 2020 Restated 2019 2020 REF Change 1 ASSETS-Current assets Cash Temporary investments Accounts receivable Allowance for doubtful accounts Total current assets 1 1 1 1111 mark mark mark mark 1 Capital assets Land Building and equipment Accumulated depreciation Total capital assets 1+5 1 2+3 1 mark mark mark 1 Total assets 1 1 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Interest payable Income taxes payable Dividents payable Total current liabilities 111 mark mark mark mark 2+4 1 1 1 Long term liabilities Long term bank loan Bond payable Future income tax liability Total long term liabilities 5% Miami property due 2019 1 1 mark mark mark Total liabilities 1 mark Shareholders' equity Common shares Retained earnings Total shareholders' equity 5 2 1 mark Total liabilities and shareholders' equity Difference: Assets - (Liabilities + Shareholders' equity) Total liabilities and shareholders' equity Difference : Assets - (Liabilities + Shareholders' equity) MC TRAVEL INC. Income Statement For The Year Ended December 31, 2020, $ Restated 2020 1 mark 1 1 3 1 Sales Expenses: Salaries and wages Purchases from tour operators Depreciation expense Office, general, and selling expenses Bad debt expenses Interest on long-term debt Bond interest expense Total expenses mark mark mark mark mark mark 1 1 1 1 mark 1 1 1 mark mark mark Income before other income and expenses Investment income Gain on sale of equipment Income before income taxes Income tax expense Net income Difference : Debits - Credits 4 1 28 mark marks MC TRAVEL INC. Statement of Cash Flows For The Year Ended December 31, 2020 1 1 1 1 1 Net income Depreciation expense Doubtful receivables written off Bad debt expense Change in accounts receivable Change in temporary investments Change in accounts payable Change in interest payable Change in income tax payable Gain on sale of equipment Change in future income tax liability Cash flow from operating activities 1 1 mark mark mark mark mark mark mark mark mark mark mark 1 1 1 1 1 New equipment purchased Old equipment sold Cash flow from investing activities mark mark 1 1 Change in dividends payable Change in LT bank loan Cash flow from financing activities mark mark 1 Total cash increase/(decrease) 1 1 mark Beginning cash balance Cash increase/(decrease) Ending cash balance 1 1 mark mark mark marks 1 19 Ending cash balance - balance sheet Difference Land adjusting entry carried from last year to update the opening balances in 2020. 1 1 mark mark Adjustment for prior year end's accumulated depreciation, income tax payable and retained earnings. Carried in 2020 to update 2019 opening balances. 2) 1 1 mark mark mark 1 Depreciation adjusting entry in 2020. 3) 2 2 mark mark Income tax expense adjustment due to (3) above in 2020. =) 2 2 mark mark Owner's transfer of land at fair value in 2020. 5) 2 2 mark mark Plugged in number to update the Retained Earnings as at December 31, 2020. Credit adjustment in 2020 Income Statement from entry (3) above : Debit adjustment in 2020 Income Statement from entry (4) above : Plugged in number to RE to show the effect of adjustments on net income: 1 1 mark mark 1 1 1 mark mark mark Accumulated depreciation balance at January 1, 2020: Depreciation charge for 2020: Would be accumulated deprec. balance at January 1, 2020: Accumulated depreciation balance given at December 31, 2020: Accumulated depreciation debit entry for the equipment sold in 2020: 1 1 mark mark 1 mark 1 mark Cost of the equipment sold: Building and equipment balance at January 1, 2020: Equipment purchased during the year-2020: Building and equipment's would be balance at December 31, 2020: Building and equipment's balance-given at December 31, 2020: Cost of the equipment sold: 1 1 mark mark Entry must have been made by the company regarding the equipment disposal-sale: Cash Accumulated depreciation of the equipment sold Cost of the equipment Gain from sale of the equipment 1 1 1 1 32 mark mark mark mark marks 0 o MC TRAVEL INC. Balance Sheet December 31, $ 2020 Adjustments DR CR Restated 2020 Restated 2019 2020 REF Change 1 ASSETS-Current assets Cash Temporary investments Accounts receivable Allowance for doubtful accounts Total current assets 1 1 1 1111 mark mark mark mark 1 Capital assets Land Building and equipment Accumulated depreciation Total capital assets 1+5 1 2+3 1 mark mark mark 1 Total assets 1 1 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Interest payable Income taxes payable Dividents payable Total current liabilities 111 mark mark mark mark 2+4 1 1 1 Long term liabilities Long term bank loan Bond payable Future income tax liability Total long term liabilities 5% Miami property due 2019 1 1 mark mark mark Total liabilities 1 mark Shareholders' equity Common shares Retained earnings Total shareholders' equity 5 2 1 mark Total liabilities and shareholders' equity Difference: Assets - (Liabilities + Shareholders' equity) Total liabilities and shareholders' equity Difference : Assets - (Liabilities + Shareholders' equity) MC TRAVEL INC. Income Statement For The Year Ended December 31, 2020, $ Restated 2020 1 mark 1 1 3 1 Sales Expenses: Salaries and wages Purchases from tour operators Depreciation expense Office, general, and selling expenses Bad debt expenses Interest on long-term debt Bond interest expense Total expenses mark mark mark mark mark mark 1 1 1 1 mark 1 1 1 mark mark mark Income before other income and expenses Investment income Gain on sale of equipment Income before income taxes Income tax expense Net income Difference : Debits - Credits 4 1 28 mark marks MC TRAVEL INC. Statement of Cash Flows For The Year Ended December 31, 2020 1 1 1 1 1 Net income Depreciation expense Doubtful receivables written off Bad debt expense Change in accounts receivable Change in temporary investments Change in accounts payable Change in interest payable Change in income tax payable Gain on sale of equipment Change in future income tax liability Cash flow from operating activities 1 1 mark mark mark mark mark mark mark mark mark mark mark 1 1 1 1 1 New equipment purchased Old equipment sold Cash flow from investing activities mark mark 1 1 Change in dividends payable Change in LT bank loan Cash flow from financing activities mark mark 1 Total cash increase/(decrease) 1 1 mark Beginning cash balance Cash increase/(decrease) Ending cash balance 1 1 mark mark mark marks 1 19 Ending cash balance - balance sheet Difference