Need to do a reclassification journal entry for Damage settlement... .

M2 GR VALLEY PUBLISHING COMPANY #851 - Professional Fees 12/31/20x2 [Prepared by client 11/17/20x3 DESCRIPTION AMOUNT PAYEE Voucher No. 3-07 3-24 4-15 4-19 6-20 9-24 11-22 Baynes and Grey, CPA Gil Bostrow, Attorney Gl Bostrow, Attorney Baynes and Grey, CPA G# Bostrow, Attorney Gil Bostrow, Attorney Gil Bostrow Attorney Annual Audit Retainer Damage Settlement Tax Returns Retainer Retainer Legal Services, Purchase of Newspaper Design Interior of Building Retainer 44,000 VY 3,800 W 143 000 VY 8,750VY 3,800 W 3,800 W 16,500 VY 12-09 12-10 Bates and Hurley. Architect Gil Bostrow Attorney 27,300 VYO 3,800 W 2 3 Balance per General Ledger, 12/31/X2 254.750 TB-4 1 4 5 RJE 07 Bostrow recommended and the board approved settlement of a damage suit for slander for $130,000. The board also approved Bostrow's legal fee in connection with this suit not to exceed $13,000. VALLEY PUBLISHING COMPANY CHART OF ACCOUNTS 100 CURRENT ASSETS 110 CASH 111 Central State Bank General checking account used for ordinary receipts and disbursements. Checking account for payroll checks only. 112 Central State Bank - Payroll 113 Albany National Bank Depository for cash in excess of needs for normal operations. Imprest petty cash fund. 115 Petty Cash 120 ACCOUNTS RECEIVABLE 121 Trade Accounts Receivable Control account for 30-day trade receivables. Consists of local advertisers and a national agency. Receivables for unusual items. 125 Other Receivables 126 Miscellaneous Receivables Amounts due from non-trade and employee accounts To provide for estimated losses en uncollectible accounts. 129 Allowance for Doubtful Accounts 130 INVENTORY 131 Newsprint Inventory An inventory account for unused newsprint. Debited during the year for all newsprint purchases including freight. Credited at year- end for newsprint consumed based on physical inventory 140 PREPAID EXPENSE 141 Prepaid Insurance 142 Prepaid Rent Insurance premiums applicable to future periods. Lease payments made by Valley applicable to future periods. Interest paid in advance applicable to future periods. Net deferred income taxes 143 Prepaid Interest 151 Deferred Tax (Asset) Investments in non-operating assets such as stocks, bonds, etc., except affiliated companies. 200 OTHER ASSETS PE-3 201 Investments - General 202 Other Assets Non operating assets other than investments 300 PROPERTY AND EQUIPMENT 310 Land 320 Buildings 329 Control account for the cost of land used in operations Control account for real property investments Depreciation to date on buildings Accumulated Depreciation - Building Printing Equipment 330 339 Control account for the cost of equipment used in the printing process. Depreciation to date on printing equipment. Accumulated Depreciation - Printing Equipment Office Furniture and Equipment 340 349 Accumulated Depreciation Furniture and Equipment Computers Control account for the cost of all furnishings and equipment other than printing equipment and computers. Depreciation to date on furniture and equipment Control account for the cost of computers used for newspaper preparation and accounting. Depreciation to date on computers. 350 359 Accumulated Depreciation - Computers 400 CURRENT LIABILITIES 410 CURRENT DEBT 411 Short-Term Loans Short-term notes owing to banks and other credit grantors. 420 ACCOUNTS PAYABLE 421 Vouchers Payable Liability account for trade payables. 430 ACCRUED EXPENSES 431 Accrued Payroll - Net Accrued liability account for the net amount of payrolls. Accrued liability accounts for unpaid payroll taxes (employer's portion plus amounts withheld from employees). 432 Accrued Payroll Taxes 400 CURRENT LIABILITIES (continued) 430 ACCRUED EXPENSES (continued) 433 Accrued Property Taxes Accrued liability account for unpaid taxes on real and personal property 434 Accrued Interest Liability account for accrued interest on interest-bearing obligations. 435 Accrued Pension Accrued liability for pension contributions for employees. 440 DEFERRED REVENUE 441 Unearned Subscription Undelivered subscriptions paid in advance. Revenue 442 Payable to Route Carriers Amounts due the carriers for papers delivered 450 TAXES ON INCOME 451 Income Taxes - Current Liability account for taxes on current income. 460 OTHER CURRENT LIABILITIES 461 Dividends Payable Liability account for declared but unpaid dividends. 500 LONG-TERM DEBT Long-Term Debt 510 Control account for long-term notes and bonds. 550 Income Taxes - Deferred Liability account for deferred taxes on income. 600 STOCKHOLDERS EQUITY 610 CONTRIBUTED CAPITAL 611 Common Stock For the par value of the common stock issued. 612 Paid-in Capital For amounts paid for common stock in excess of par value. 620 OTHER CAPITAL 621 Retained Earnings For undistributed earnings. 622 Current Net Income Current year's earnings before year-end closing. 700 REVENUE 710 ADVERTISING 711 Local Display 712 National Display For revenues from display advertising by local advertisers. For revenues from display advertising by national advertisers. For revenues from classified ads. Allowances should be charged to this account. 713 Classified 720 PUBLICATIONS 721 Publication Sales For revenues from subscriptions and from newsrack sales of newspapers. 800 EXPENSE 810 COST OF GOODS SOLD 811 Newsprint and Ink For the cost of newsprint consumed and ink purchased. See related Newsprint Inventory account (131). 820 EMPLOYEE RELATED EXPENSES 821 Salaries For all salaries and wages. 822 Advertising Commissions For commissions allowed to the advertising manager on all advertising revenue, to sales- men on local advertising, and to the national agency on national advertising. 823 Payroll Taxes For employer's share of all payroll taxes. 824 Employee Benefits For pension and other benefits provided the employees 830 DIRECT NEWSPAPER EXPENSES 831 Correspondents' Fees For payments made to local freelance reporters for news and feature articles accepted for publication 832 Newspaper Services For newswire service, syndicated feature service, comics, etc. For the cost of all local pictures and engraving. 833 Photo and Engraving For all delivery costs to carriers and news- 834 Circulation and Delivery stands and postage to mail subscribers. For all office, newsroom, printing, and advertising 835 Supplies supplies, including monthly advertising services. 300 EXPENSE (continued) 340-899OTHER OPERATING EXPENSES 841 Rent 842 Utilities Insurance 843 844 Property Taxes 846 Repairs and Maintenance For building rent. See related Prepaid Rent account (142). For costs of water, gas, electricity, and telephone. For expired insurance premiums. See related account for Prepaid Insurance (141). Expense account for real and personal property taxes. See related account for Accrued Property Taxes (433). An expense account for ordinary repairs made to all fixed assets. For all depreciation expense. See related accumu- lated depreciation accounts (329 through 359). For costs of professional services such as legal and auditing fees. For expected losses on uncollectible receivables. See related account, Allowance for Doubtful Accounts (129). For all other infrequent, small expense items or items for which no other account is provided. 847 Depreciation 851 Professional Fees 853 Estimated Loss From Doubtful Accounts 890 Miscellaneous Expense 900 NON OPERATING ITEMS 910 REVENUE ITEMS 911 Income from Investments 912 Gain (Loss) on Disposal of Assets Interest Income For dividends and interest received on invest- ments in stocks and bonds, and income from other non-operating assets. For gains or losses on the sale, trade-in of assets, or write-off of any noncurrent asset. For interest on interest-bearing assets other than bonds. For all other infrequent or small income items. Usually from sale of scrap paper and occasional discounts received on the purchase of supplies. 914 919 Miscellaneous Income 920 EXPENSE ITEMS 921 Interest Expense 923 Other Expense For interest on interest-bearing obligations For unusual losses or expenses requiring separate disclosure. For losses due to catastrophes such as fire, theft, windstorm, etc. 924 Casualty Loss 950 TAXES ON INCOME 951 Estimated Taxes on Income For estimated federal and state income taxes. M2 GR VALLEY PUBLISHING COMPANY #851 - Professional Fees 12/31/20x2 [Prepared by client 11/17/20x3 DESCRIPTION AMOUNT PAYEE Voucher No. 3-07 3-24 4-15 4-19 6-20 9-24 11-22 Baynes and Grey, CPA Gil Bostrow, Attorney Gl Bostrow, Attorney Baynes and Grey, CPA G# Bostrow, Attorney Gil Bostrow, Attorney Gil Bostrow Attorney Annual Audit Retainer Damage Settlement Tax Returns Retainer Retainer Legal Services, Purchase of Newspaper Design Interior of Building Retainer 44,000 VY 3,800 W 143 000 VY 8,750VY 3,800 W 3,800 W 16,500 VY 12-09 12-10 Bates and Hurley. Architect Gil Bostrow Attorney 27,300 VYO 3,800 W 2 3 Balance per General Ledger, 12/31/X2 254.750 TB-4 1 4 5 RJE 07 Bostrow recommended and the board approved settlement of a damage suit for slander for $130,000. The board also approved Bostrow's legal fee in connection with this suit not to exceed $13,000. VALLEY PUBLISHING COMPANY CHART OF ACCOUNTS 100 CURRENT ASSETS 110 CASH 111 Central State Bank General checking account used for ordinary receipts and disbursements. Checking account for payroll checks only. 112 Central State Bank - Payroll 113 Albany National Bank Depository for cash in excess of needs for normal operations. Imprest petty cash fund. 115 Petty Cash 120 ACCOUNTS RECEIVABLE 121 Trade Accounts Receivable Control account for 30-day trade receivables. Consists of local advertisers and a national agency. Receivables for unusual items. 125 Other Receivables 126 Miscellaneous Receivables Amounts due from non-trade and employee accounts To provide for estimated losses en uncollectible accounts. 129 Allowance for Doubtful Accounts 130 INVENTORY 131 Newsprint Inventory An inventory account for unused newsprint. Debited during the year for all newsprint purchases including freight. Credited at year- end for newsprint consumed based on physical inventory 140 PREPAID EXPENSE 141 Prepaid Insurance 142 Prepaid Rent Insurance premiums applicable to future periods. Lease payments made by Valley applicable to future periods. Interest paid in advance applicable to future periods. Net deferred income taxes 143 Prepaid Interest 151 Deferred Tax (Asset) Investments in non-operating assets such as stocks, bonds, etc., except affiliated companies. 200 OTHER ASSETS PE-3 201 Investments - General 202 Other Assets Non operating assets other than investments 300 PROPERTY AND EQUIPMENT 310 Land 320 Buildings 329 Control account for the cost of land used in operations Control account for real property investments Depreciation to date on buildings Accumulated Depreciation - Building Printing Equipment 330 339 Control account for the cost of equipment used in the printing process. Depreciation to date on printing equipment. Accumulated Depreciation - Printing Equipment Office Furniture and Equipment 340 349 Accumulated Depreciation Furniture and Equipment Computers Control account for the cost of all furnishings and equipment other than printing equipment and computers. Depreciation to date on furniture and equipment Control account for the cost of computers used for newspaper preparation and accounting. Depreciation to date on computers. 350 359 Accumulated Depreciation - Computers 400 CURRENT LIABILITIES 410 CURRENT DEBT 411 Short-Term Loans Short-term notes owing to banks and other credit grantors. 420 ACCOUNTS PAYABLE 421 Vouchers Payable Liability account for trade payables. 430 ACCRUED EXPENSES 431 Accrued Payroll - Net Accrued liability account for the net amount of payrolls. Accrued liability accounts for unpaid payroll taxes (employer's portion plus amounts withheld from employees). 432 Accrued Payroll Taxes 400 CURRENT LIABILITIES (continued) 430 ACCRUED EXPENSES (continued) 433 Accrued Property Taxes Accrued liability account for unpaid taxes on real and personal property 434 Accrued Interest Liability account for accrued interest on interest-bearing obligations. 435 Accrued Pension Accrued liability for pension contributions for employees. 440 DEFERRED REVENUE 441 Unearned Subscription Undelivered subscriptions paid in advance. Revenue 442 Payable to Route Carriers Amounts due the carriers for papers delivered 450 TAXES ON INCOME 451 Income Taxes - Current Liability account for taxes on current income. 460 OTHER CURRENT LIABILITIES 461 Dividends Payable Liability account for declared but unpaid dividends. 500 LONG-TERM DEBT Long-Term Debt 510 Control account for long-term notes and bonds. 550 Income Taxes - Deferred Liability account for deferred taxes on income. 600 STOCKHOLDERS EQUITY 610 CONTRIBUTED CAPITAL 611 Common Stock For the par value of the common stock issued. 612 Paid-in Capital For amounts paid for common stock in excess of par value. 620 OTHER CAPITAL 621 Retained Earnings For undistributed earnings. 622 Current Net Income Current year's earnings before year-end closing. 700 REVENUE 710 ADVERTISING 711 Local Display 712 National Display For revenues from display advertising by local advertisers. For revenues from display advertising by national advertisers. For revenues from classified ads. Allowances should be charged to this account. 713 Classified 720 PUBLICATIONS 721 Publication Sales For revenues from subscriptions and from newsrack sales of newspapers. 800 EXPENSE 810 COST OF GOODS SOLD 811 Newsprint and Ink For the cost of newsprint consumed and ink purchased. See related Newsprint Inventory account (131). 820 EMPLOYEE RELATED EXPENSES 821 Salaries For all salaries and wages. 822 Advertising Commissions For commissions allowed to the advertising manager on all advertising revenue, to sales- men on local advertising, and to the national agency on national advertising. 823 Payroll Taxes For employer's share of all payroll taxes. 824 Employee Benefits For pension and other benefits provided the employees 830 DIRECT NEWSPAPER EXPENSES 831 Correspondents' Fees For payments made to local freelance reporters for news and feature articles accepted for publication 832 Newspaper Services For newswire service, syndicated feature service, comics, etc. For the cost of all local pictures and engraving. 833 Photo and Engraving For all delivery costs to carriers and news- 834 Circulation and Delivery stands and postage to mail subscribers. For all office, newsroom, printing, and advertising 835 Supplies supplies, including monthly advertising services. 300 EXPENSE (continued) 340-899OTHER OPERATING EXPENSES 841 Rent 842 Utilities Insurance 843 844 Property Taxes 846 Repairs and Maintenance For building rent. See related Prepaid Rent account (142). For costs of water, gas, electricity, and telephone. For expired insurance premiums. See related account for Prepaid Insurance (141). Expense account for real and personal property taxes. See related account for Accrued Property Taxes (433). An expense account for ordinary repairs made to all fixed assets. For all depreciation expense. See related accumu- lated depreciation accounts (329 through 359). For costs of professional services such as legal and auditing fees. For expected losses on uncollectible receivables. See related account, Allowance for Doubtful Accounts (129). For all other infrequent, small expense items or items for which no other account is provided. 847 Depreciation 851 Professional Fees 853 Estimated Loss From Doubtful Accounts 890 Miscellaneous Expense 900 NON OPERATING ITEMS 910 REVENUE ITEMS 911 Income from Investments 912 Gain (Loss) on Disposal of Assets Interest Income For dividends and interest received on invest- ments in stocks and bonds, and income from other non-operating assets. For gains or losses on the sale, trade-in of assets, or write-off of any noncurrent asset. For interest on interest-bearing assets other than bonds. For all other infrequent or small income items. Usually from sale of scrap paper and occasional discounts received on the purchase of supplies. 914 919 Miscellaneous Income 920 EXPENSE ITEMS 921 Interest Expense 923 Other Expense For interest on interest-bearing obligations For unusual losses or expenses requiring separate disclosure. For losses due to catastrophes such as fire, theft, windstorm, etc. 924 Casualty Loss 950 TAXES ON INCOME 951 Estimated Taxes on Income For estimated federal and state income taxes