Need Adjustments Done

I have reposted those two questions. I could also use the Adjusted trial balance and Income statement if it's not to much trouble

Unadjunted Trial Balance December 31, 2014 Credit Debit $ 975,232 167,000 190,300 $ 350,000 24,600 177,824 75,000 150,000 4,000 60,000 20,000 37,500 5 6 Cash 7 Short term investments 8 Fair value adjustment (Trading) 9 Accounts receivable 10 Allowance for doubtful accounts 11 Inventory 12 Purchases 13 Prepaid insurance 14 LT Debt) investments (HTM) 15 Land 16 Building 17 Accumulated depreciation building 18 Equipment 19 Accumulated depreciation equipment 20 Patent 21 Accounts payable 22 Notes payable 23 Income taxes payable 24 Unearned rent revenue 25 Bonds Payable 26 Premium on Bonds Payable 27 Common stock 28 PIC In Excess of Par-Common Stock 29 Retained earnings 30 Treasury stock 31 Dividends 32 Sales Revenue 33 Advertising expense 34 Wages expense 35 Office expense 36 Amortization expense 37 Depreciation expense 38 Utilities expense 39 Insurance expense 40 Income taxes expense 41 75,240 235,000 63,800 36,000 800,000 61,771 86,000 13,000 49,000 41,000 1,192,945 8,400 67,600 21,700 24,000 31,000 73,800 63,800 $ 2,587,756 $2,587,756 12 Clipboard DO Font Format Alignment Number 91 F B D F G H K 1 On March 1, ABC purchased a one-year liability insurance policy for $98,400. Upon purchase, the following journal entry was made: Dc Prepaid insurance 98,400 Cr Cash 98,400 The expired portion of insurance must be recorded as of 12/31/14. Notice that the expired portion from March through November has been recorded already. Make sure that the Prepaid Insurance balance after the adjusting entry is correct. 2 Depreciation expense must be recorded for the month of December. The building was purchased with cash on February 1, 2014 for $150,000 with a remaining useful life of 30 years and a salvage value of $6,000 The method of depreciation for the building is straight-line. The equipment was purchased with cash on February 1, 2014 for $60,000 with a remaining useful life of 5 years and a salvage value of $3,000 The method of depreciation for the equipment is double-declining balance. Depreciation has been recorded for the building and equipment for months February through November 8 3 3 on December 1, XYZ Co. agreed to rent space in ABC's building for $12,000 per month, and XYZ paid ABC on December 1 in advance for the first three months' rent The entry made on December 1 was as follows: Dr Cash 36,000 Cr Unearned rent revenue 36,000 The neared revenue account must be adjusted to reflect the amount eamed as of 12/31/14. 1 2 3 4 5 6 + Per timecards, from the last payroll date through December 31, 2014, ABC's employees have worked a total of 250 hours Including payroll taxes, ABC's wage expense averages about 51 per hour. The next payroll date is January 5, 2015. 7 4 Per timecards, from the last payroll date through December 31, 2014, ABC's employees have worked a total of 250 houes. Including payroll taxes, ABC's wage expense averages about $51 per hour. The next payroll date is January 5, 2015. The liability for wages payable must be recorded as of 12/31/14 5 On November 30, 2014, ABC borrowed $235,000 from American National Bank by issuing an interest-bearing note payable. This loan is to be repaid in three months (on February 28, 2015), along with interest computed at an annual rate of 6%. The entry made on November 30 to record the borrowing was: (for Statement of Cash Flow purposes, consider a financing item) Dr Cash 235,000 Cr Notes payable 235,000 On February 28, 2015 ABC must pay the bank the amount borrowed plus interest. Assume the beginning balance for Notes Payable is correct. Interest through 12/31/14 must be accrued on the $235,000 note. 5 6 :7 38 39 MOCI 91 B D F H K 1 2. 6 ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year-end. A physical count was taken on December 31, 2014, and the inventory on-hand at that time totaled $75,000, which reflects historical cost. Record the 2014 Cost of Goods Sold and the 12/31/14 Inventory adjustment 3 4 15 16 17 48 49 Additionally, ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value at a total inventory level A review of inventory data further indicated that the current retail sales value of the ending inventory is $110,000 and estimated costs of completion and shipping is 15% of retail. Be sure to make an additional adjustment, if necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accounting for adjustments of inventory to market value. 50 51 52 53 54 55 7 It would be unusual for a company to have an asset impairment in Year 1, but for the sake of this example, ABC realized that their intangible asset might be impaired on December 31, 2014. Record the impairment if any. The expected future net cash flows for this intangible asset totals $30,000, and the fair value of the asset is $27,500. 56 57 58 59 60 61 8 On 7/1/14, ABC purchased 7,000 shares of its own stock from existing stockholders as treasuy stock. The cost of the treasury stock was $7 per share, or $49,000 in total. The effects of this transaction are already shown in the unadjusted trial balance. On 12/31/14, ABC reissued these 7,000 shares of treasury stock at $10 per share. Record the joumal entry required for the reissuance of the treasury stock. 62 63 64 9 On 12/31/14, ABC issued 5,000 shares of $3 par value common stock at the closing market price of $7 per share. Prepare ABC's journal entey to reflect the issuance of the stock on 12/31/14 65 66 Alignment Number H91 A B D E F G K 7 58 59 10 On 7/1/14, ABC sold 12% bonds having a maturity value of $800,000 for $861,771, resulting in an effective yield of 10%. The bonds are dated 7/1/14, and mature 7/1/19. Interest is payable semiannually on July 1 and January 1. ABC uses the effective interest method of amortization for bond premium or discount. Record the adjusting entry for the accrual of interest and the related amortization on 12/31/14 Hint Develop an abbreviated amortization schedule to accurately determine the interest expense. 70 71 72 73 74 75 76 77 78 11 The following information is available for ABC Corporation at 12/31/14 regarding its investments in stocks of other companies. Securities Cost Fair Value 2,200 shares of Toyota Corporation Common Stock $ 100,000 $125,000 1,100 shares of GM. Corporation Common Stock $ 67,000 $ 34,000 $ 167.000 $ 159,000 Prepare the adjusting entry (af any) for 2014, assuming the securities are classified as trading 79 80 81 82 83 84 85 86 87 88 89 12 On 1/1/14, ABC Corporation purchased, as a held-to-maturity investment, $200,000 of the 8%, B-yens bonds of Intuit Corporation for $177,824, which provides an 11% return. Prepare ABC's 12/31/14 journal entry to reflect the receipt of annual interest and discount amortization Assume the bond investment pays interest annually on 12/31 each year and that effective interest amortization is used. Note: Notice that a discount account is not used for this investment. Therefore, for purposes of this adjusting entry, amortize the discount directly to the investment account. 13 ABC Corporation prepares an aging schedule on 12/31/14 that estimates total uncollectible accounts at $25,000. Assuming that the allowance method is used, prepare the entry to record bad debt expense 5 7 8 19 00 14 On 1/1/14, ABC Corporation signed a 5-year noncancelable lease for a delivery vehicle. The terms of the lease called for ABC to Corporation to make annual payments of $10,503 at the beginning of each year, starting January 1, 2014. The delivery velucle has an estimated useful life of 6 years and a $7,000 unguaranteed residual value. The delivery vehicle reverts back to the lessor at the end of the lease term ABC Corporation amortizes the delivery vehicle. ABC Corporation's incremental borrowing rate is 10%, and the Lessor's implicit este es unknown. No entries have yet been made concerning this lease arrangement. After determing the type of lease arrangement financing or operating), prepare the necessary multiple-part joumal entry for 2014 for ABC Corporation. (Hints: You will need to compute the present vahe of the minimum lease payments and 4 separate sub-entries for this lease transaction. Also, for Statement of Cash Flow purposes, the principal portion of te pavments are correctly categonxed as a financing activity.) 01 102 103 15 ABC Corporation provides a defined benefit pension plan for its employees. A combination adjatug entsy should be made to correctly account for this type of pension 104 plan given the following items of information for the 2014 plan year, including the recording of pension expense and the employer's contnbution to the pension plan in 2014 105 Note: Use the summary entry method as demonstrated and discussed in the chapter lectures on pension accounting to prepare the adjusting entry 106 107 Pension asset/liability Jamary 1) $0 108 Actual cetum on plan assets $40,000 109 Espected return on plan assets $20.000 Contribution (fuading in 2014 $37,000 111 Fair value of plan assets (December 31) $75,000 112 Settlement cate 104 113 Projected benefit obligation January 1) $0 Service cost $60.000 Benefits paid in 2014 $0 116 For purposes of fancial statement presentation, consider Pension Expense 4 su operating item and may berulang Pension Asset/Liability as long-term in nature. 117 118 16 On December 31, 2014, ABC Corporated 1.000 shares of restneted stock to its Cluef Financial Officer ABC stock had a fair vahe (cloting market price of $10 per lite on December 31, 2014. Additional mformation is as follows: 110 114 115 119 Garamond 11 - A A LCopy 23 Wrap Text Custom ste Total BIU ov C Format Painter a. A Merge & Center $ - % 98-98 Conditional Formatas Com Formatting Table Clipboard Font 5 Alignment Number 31 F H 1 L c. The per share, 4 A B C D E G K M 16 On December 31, 2014, ABC Corporation issued 1,000 shares of restricted stock to its Chief Financial Officer. ABC stock had a fair value (closing market price) of $10 per share on December 31, 2014. Additional information is as follows: a. The service period related to the testacted stock is 2 years. b. Vesting occurs if the CFO stays with the company for a two-year period par value of the common stock is $3 Make the appropriate accounting entry as of the grant date, 12/31/14. Note: use the alternative method as described in your textbook for deferred compensation. 5 Do this step after preparing the Income Statement except for the Income taxas line: (You wd te cakulate Income Before Income Taxes in order to calowalle fotal Income Tax Exe) 26 17 Corporate taxes are due in four estimated quarterly payments on April 15, June 15, September 15, and December 15. 27 However, for the purposes of this ABC illustration, we will assume that estimates are not paid, and that the tax is paid in full 28 on the return's March 15, 2015 due date. 29 ABC's income tax rate is 40%. The entire year's income tax expense was estimated the beginning of 2014 to be $69,600, 30 so January through November income tax expense recognized amounts to $63,800 (11/12 months). 31 Since we are assuming estimates are not made ducing the year, the balance in Income taxes payable represents 32 tax accrued for January through November. Assume no deferred tax assets or deferred tax labilities 133 Based on the income before income taxes figure from the income statement record December's income tax expense 134 so that the entire year's total tax expense is correct. 135 136 137 138 139 140 141 142 143 144 145 146 147 prepare the entry to record bad debt expense. yet 14 On 1/1/14, ABC Corporation signed a 5-year noncancelable lease for a delivery vehicle. The terms of the lease called for ABC to Corporation to make annual payments of $10,503 at the beginning of each year, starting January 1, 2014. The delivery vehicle has an estimated useful life of 6 years and a $7,000 unguaranteed residual value. The delivery vehicle reverts back to the lessor at the end of the lease team. ABC Corporation amortizes the delivery vehicle. ABC Corporation's incremental borrowing rate is 10%, and the Lessor's implicit cate is unknown. No entries have been made concerning this lease arrangement. After determining the type of lease arrangement (financing or operating prepare the necessary multiple-pan entry for 2014 for ABC Corporation. (Hints: You will need to compute the present value of the minimum lease payments and 4 separate sub-entries for this lease transaction. Also, for Statement of Cash Flow purposes, the principal portion of lease payments are correctly categorized as a financing actity) alom A combination adjusting entry should be made to correctly account for this type a Do this step after preparing the Income Statement except for the Income taxas line: (You need to calculate Income Before Income Tax in order to ce 17 Corporate taxes are due in four estimated quarterly payments on April 15, June 15, September 15, and December 15. However, for the purposes of this ABC illustration, we will assume that estimates are not paid, and that the tax is paid in full on the return's March 15, 2015 due date. ABC's income tax rate is 40%. The entire year's income tax expense was estimated at the beginning of 2014 to be $69,600, so January through November income tax expense recognized amounts to $63,800 (11/12 months). Since we are assuming estimates are not made during the year, the balance in Income taxes payable represents tax accrued for January through November. Assume no deferred tax assets or deferred tax liabilities. Based on the income before income taxes figure from the income statement, record December's income tax expense so that the entire year's total tax expense is correct. 3 4 :5 36