Please give correct answers for the following options, including a short explanation and computation if needed

You have been engaged to audit the nancial statements of HITECH CORPORATION for the year ended December 31,2020. The company's unadjusted trial balance on December 31,2020, is presented below: Hl-TECH Corporation Trial Balance December 31, 2020 Petty cash fund $ Cash in bani-c Accounts receivable Allowance for bad debts Merchandise Inventory Investment in stock Land Building Accumulated depreciationbuilding Equipment Accumulated depreciationaeouipment Note payable Liability under stock appreciation plan Bonds payable Premium on bonds payable Common share Retained earnings Sales Rental revenue Dividend Income Cost of goods sold Salaries expense Commission expense Supplies expense Depreciation expense Repairs expense Interest expense Utilities expense 5 Debit Credit 5,000 92,550 450,000 21 ,500 1 ,300,000 4,250,000 1 ,000,000 4,500,000 900,000 800,000 1 30,000 59,000 90,500 5,000,000 1 14,000 4,000,000 51 5,950 ?,000,000 1 50,000 1 Y5,000 3,500,000 1 450,000 55,000 59,000 343,400 140,000 954,000 1 35,000 19,144,950 19,144,950 1 . A cash count was conducted by your staff on the morning of January 3, 2021. The following items were found in the petty cash drawer: Coins and currency $ 1,002 Postage stamps 58 An IOU from M. Hans, an employee, for cash advance 800 Check payable to HI-TECH CORP. from Fred Astaire, an employee marked NSF 3,000 Vouchers for the following: Stamps 400 Two movie tickets for petty cash custodian 140 Transportation 200 $ 5,600 2 . The following information pertains to the company's general cash: General Ledger Bank Statement Balance, November 30 $ 46,110 $ 57,530 Deposits 250,560 Cash receipts journal 254,560 Checks cleared (236, 150) Cash disbursement journal (218, 110) December bank charges 870) Note paid directly (61,000) NSF check 3, 110) Balance, December 31 $ 82,560 $ 6,960 November 30 Bank Reconciliation Information on General Ledger and Bank Statement Balance per bank $ 57,530 Deposit in transit 6,000 Outstanding checks 17,420 Balance per books 46, 110Additionai information obtained: a. Checks clearing that were outstanding on November 30 totaled $16,920. b. Checks clearing that were recorded in the December disbursementsjournal totaled $204,6i0. c. A check for $10,600 cleared the bank, but had not been recorded in the cash disbursementsjournal. it was for an acquisition of inventory that was received on December 31 , 2020. HlTECH CORP. uses the periodic inventory method. d. A check for $3,960 was charged to HlTECH CORP. but had been written on a different company's bank account. e. Deposits included $6,000 from November and $244,560 for December. f. The bank charged HlTECH's account for a nonsu'fcient check totaling $3,110. The manager concluded that the customer intentionally closed its account and the owner left the country. g. A note for $58,000, plus interest, was paid directly to the bank under an agreement signed four months ago. The note payable was recorded at $58,000 on HlTECH CORP.'s books. An examination of HlTECH's allowance for bad debts reveals the following: Estimated Actual Bad Debts Bad Debts 201? $ 22,000I $ 9,000 2018 26,000I 13,600I 2019 33,000 1?,900 2020 No adjustment yet 19,000 In the past, HlTECH has estimated that 3% of sales will be uncollectible. In 2020, HlTECH decided to use the percentage of receivable method to estimated bad debts. Ten percent {10%) of company's receivables are estimated to be uncollectible. On January 1, 2018, HlTECH implemented a stock appreciation right (BAR) plan for its top executives. The plan was to run from January 1, 2018, to December 31, 2020. This period was the intended service period and the date of exercise was December 31 , 2020. At December 31, 2020, [the measurement date}, the executives were to receive in cash the appreciation in the market value of the stock over the 3year period. Using the market prices of the stock at the end of 201 8 and 2019, respectively, HlTECH estimated compensation expense of $30,800 for 2018 and $49,?00 for 2019. At December 31, however, the market price of the stock was below its price at January 2018. HlTECH failed to accrue commissions payable at the end of each of the last two years, as follows: December 31 , 2019 $ 40,000 December 31 , 2020 $ 25,000 Invoices for ofce supplies purchased have been charged to expense when received. Inventories of supplies on hand at the end of each year have been ignored, and no entry has been made for them. December 31 , 2018 $ 13,000 December 31 , 2019 $ i,400 December 31 , 2020 $ 14,200 Salaries payable on December 31, have been constantly omitted from the records of that date and have been entered as expense when paid in the following year. The amounts of the accruals recorded in this manner are: December 31 , 2018 $ 22,000 December 31 , 2019 $ 30,000 December 31 , 2020 $ 18,800 'a. 10. 11. 12. 13. Rent was received from a tenant in December 2020; the amount, $13,000, was recorded as income at that time even though the rental pertained to 2021. The physical inventory count on December 31, 2019, improperly excluded merchandise costing $38,000 that had been temporarily stored in a public warehouse. The physical inventory count on December 31, 2020, improperly included merchandise with a cost of $1 i',000 that had been recorded as a sale on December 28, 2020 and held for the customer to pick up on January 2, 2021. In 2020, the company sold for $3,?00 fully depreciated equipment that originally cost. $22,000. The company credited the proceeds from the sale to the Equipment account. A piece of equipment was purchased on January 2, 2020, for $32,000 and was charged to Repair expense. The equipment is estimated to have service life of 8 years and no residual value. HlTECH CORR, uses the straightline depreciation method for this type of equipment. During 2020, a personal injury su'rt was led against HlTECH CORR, claiming damages of $430,000. The company's legal counsel has indicated that an unfavorable verdict approximating $100,000 will probably resutt. The company has not reected this situation in its books. HlTECH CORR, issued its 9%, 25-year mortgage bonds in the principal amount of $5,000,000 on January 2, 2005 at a discount of $250,000, which it proceeded to amortize by charges to expense over the life of the issue on a straightline basis. On December 28, 201 9, the HlTECH CORR, issued its 1 1%, 20Lyear debenture bonds in the principal amount of $5,000,000 at 102, and the proceeds were used to redeem the 9%, 25year mortgage bonds on January 2,2020, at 104% of the principal amount. The loss on the retirement of bonds was charged to Interest Expense. On January 1, 2020, HlTECH CORR, purchased 250,000 shares of LOTECH Company's 1,000,000 shares of outstanding common shares for $4,250,000. LOTECH Company's total net worth or book value was $15,000,000 at the date of HlTECH CORR's 25% investment. tt was determined that $300,000 of this is attributable to its share of undervalued depreciable assets of LOTECH Company. HlTECH CORR, estimated the average remaining life of the undervalued assets to be 10 years and decided upon a 20year amortization for goodwill. For the year 2020, LOTECH Company reported net income of $1 ,400,000 and paid dividends of $00,000. QUESTIONS: 1. How much is the petty cash shortage? a. 4,998.00 C . 458.00 b 3,458.00 d. $ 400.00 2. What is the adjusted balance of petty cash fund for the balance sheet at December 31, 2020? a. $ 6,000.00 C. $ 5,542.00 b 1,002.00 d. $ 5,600.00 3. What is the total deposits in transit on December 31, 2020? a. $ 6,000.00 C. $ 16,000.00 b. 13,960.00 d. 10,000.00 4. What is the total outstanding checks on December 31, 2020? a. $ 13,940.00 C . $ 3,340.00 b 9,980.00 d. 17,050.00 5. What is the adjusted cash in bank balance at December 31, 2020? a. $ 6,980.00 C. $ 10,940.00 b $ 17,580.00 d. $ 7,982.00 6. The adjusting entry to record the NSF check is: a. Accounts receivable $ 3, 110.00 Cash in bank $ 3, 110.00 b. Cash in bank $ 3, 110.00 Accounts receivable $ 3, 110.00 C. Allowance for bad debts $ 3, 1 10.00 Accounts receivable $ 3, 110.00 d. Allowance for bad debts $ 3, 110.00 Cash in bank $ 3, 110.00 7. The adjusting entry to record the payment of note payable is: a. Note Payable 58,000.00 Interest Expense 3,000.00 Cash in bank $ 61,000.00 b. Note Payable $ 58,000.00 Interest Payable 3,000.00 Cash in bank $ 61,000.00 C. Note Payable $ 61,000.00 Cash in bank $ 61,000.00 d. Note Payable $ 58,000.00 Cash in bank $ 58,000.007 a. 3 21,500.00 b. 3 25,510.00 7 a. Bad debts expense Allowance for bad debts b. Bad debts expense Allowance for bad debts c. Bad debts expense Allowance for bad debts d. Allowance for bad debts Bad debts expense c. d. B. What is the adjusted balance of the allowance for bad debts at December 31', 2020 3 23,500.00 3 45,000.00 9. What is the adjusting entry to record the bad debts expense for the year? 3 25,510.00 3 25,510.00 3 45,000.00 3 45,000.00 3 55,500.00 3 55,500.00 3 15,350.00 3 15,350.00 '10. What adjusting entry should be made at December 31, 2020, concerning lit-TECH CORR's stock appreciation right plan? a. Salaries expense Liability under stock appreciation plan b. Salaries expense Liability under stock appreciation plan c. Liability under stock appreciation plan Salaries expense d. Liability under stock appreciation plan Retained earnings 11'. The total commission expense for 2020 should be a. 3 50,000.00 0. $ a. Commission expense $15,000. b. Retained earnings $40,000. 1'3. What is the total supplies expense for 2020? a. 3 55,500.00 b. 3 55,400.00 a. Credit to Supplies on hand $14,200. b. Credit to Retained earnings $?,400. 5" c. d. c. d. c. d. 3 15,500.00 3 15,500.00 3 45,500.00 3 45,500.00 3 50,500.00 3 50,500.00 3 50,500.00 3 50,500.00 3 50,000.00 3 105,000.00 1'2. The adjusting entry to correct the commission expense should include a debit to Retained earnings $65,000. Commissions payable $15,000. 3 44,500.00 3 52,200.00 1'4. The adjusting entry to correct the errors in recording office supplies should include a Debit to Supplies expense $6,800. Credit to Supplies expense $14,200. 15. In correcting the errors in recording salary accruals, the Retained Earnings account should be a. Decreased by $30,000 C. Increased by $18,800 b. Increased by $11,200. d. Decreased by $14,000 16. As a result of HI-TECH's failure to properly record salary accruals, net income of 2019 was a. Understated by $11,200. C. Overstated by $22,000. b. Understated by $30,000. d. Overstated by $8,000. 17. What is the adjusting entry to correct the Rental Revenue account at December 31, 2020? a. Rental revenue 6 13,000.00 Unearned rental revenue $ 13,000.00 b. Unearned rental revenue $ 13,000.00 Rental revenue $ 13,000.00 C. Retained earnings $ 13,000.00 Rental revenue $ 13,000.00 d. No adjusting entry 18. The adjusting entry to correct the inventory errors is a. Cost of goods sold $ 55,000.00 Merchandise inventory, end $ 55,000.00 b. Cost of goods sold $ 55,000.00 Retained earnings 38,000.00 Merchandise inventory, end 17,000.00 C. Retained earnings $ 38,000.00 Merchandise inventory, end $ 38,000.00 d. Retained earnings $ 55,000.00 Cost of goods sold $ 17,000.00 Merchandise inventory, end $ 38,000.00 19. The total cost of goods sold for 2020 is a. $ 3,540,000.00 C. $ 3,665,600.00 b. $ 3,638,000.00 d. $ 3,655,000.00 20. The adjusted merchandise inventory at December 31, 2020, is a. $ 1,283,000.00 C. $ 1,245,000.00 b. $ 1,293,600.00 d. $ 1,355,000.00 21. What is the gain on sale of equipment? a. $ 18,300.00 C. $ 25,700.00 b. 3,700.00 d $0.0022. What is the adjusted balance of Equipment account at December 31, 2020? a. 828,300.00 C. $ 8, 100,000.00 $ 809,700.00 d. $ 813,700.00 23. What is the adjusted balance of Accumulated Depreciation-Equipment at December 31, 2020? a. $ 134,000.00 C. $ 130,300.00 b. $ 108,000.00 d. $ 112,000.00 24. What is the entry to take up the estimated loss on litigation? a. No entry b. Estimated litigation loss $ 100,000.00 Estimated litigation liability $ 100,000.00 C. Retained earnings $ 100,000.00 Estimated litigation liability $ 100,000.00 d. Estimated litigation loss $ 330,000.00 Estimated litigation liability $ 330,000.00 25. The book value of the 9% mortgage bonds on January 2, 2020 is a. $ 4,900,000.00 C. $ 5, 120,000.00 b $ 5,000,000.00 d. $ 4,850,000.00 26. The loss on the retirement of 9% mortgage bonds is a. $ 200,000.00 C. $ 300,000.00 b $ 420,000.00 d $0.00 27. The total interest expense for 2020 is a. 657,000.00 C. $ 648,000.00 $ 654,000.00 d. $ 651,000.00 28. HI-TECH CORP.'s income from its investment in common shares for 2020 is a. $ 700,000.00 C . $ 310,000.00 b 320,000.00 d. $ 350,000.00 29. The adjusted balance of Investment in Stock at December 31, 2020, is a. $ 4,385,000.00 C. $ 4,565,000.00 b $ 3,860,000.00 d $ 4,250,000.00 30. The dividend income for 2020, is a. $ 175,000.00 C. $ 700,000.00 b $ 135,000.00 d. $0.00