Please record the journal entries to the appropriate columns. I have attached a blank sheet to fill in with each corresponding journal entry 1-15. If the numbers do not add up please still add them in. You may have to click on the photos to see the whole document. Please simply type out which category each journal entry will go in for example (accounts receivable, cash). You do not have to place it in the excel document

1 Okay, let's get depreciation out of the way first. Let's pretend Merck uses both straight-line and

double declining balance (DDB) depreciation methods. Let's assume it uses DDB for Buildings and

and straight-line for Machinery, equipment and office furnishings. Land and Construction in progress

are not depreciated. Assum $9,600 of accumulated depreciation is associated with Buildings and the

remainder ($8,086) is associated with Machinery, equipment and office funishings. Further assume that

Buildings have a depreciable life of 23 years. Assume Machiery, equipment and office furnishings has a

6-year life and $900 salvage value. Please record depreciation.

2 Some office furnishings were sold for $1,550 cash. The office furnishings had a cost of $2,600 and had been

depreciated $1,900. Record the sale.

3 Purchased laboratory equipment for $230. Additional costs included freight of $2, labor to install the

equipment $3, labor to calibrate the equipment $1. Cash of $150 was paid and the rest was financed with a

long-term loan.

4 Made extensive expenditures to improve laboratory machinery $6. These expenditures doubled the

productivity of the machinery. Cash was paid.

5 Made significant expenditures to repair old buildings, $11, paid in cash. These repairs did not "improve"

the buildings or increase their life.

6 Buildings were lost in a fire. The cost of the buildings was $160 and they had been depreciated $110.

Insurance paid for $38, received in cash.

7 Merck developed several new pharmaceitical medicines, and successfully patented the medicines for

several years, cost of the patents was $9, paid in cash.

8 Merck developed a new logo for its brand and had the logo trademarked, paying $4 cash.

9 Merck purchased another pharmaceutical company, for cash. The net assets (assets minus liabilities)

acquired were, at their fair market values, accounts receivable $24, inventories $180, other current assets $15,

buildings $860, trade accounts payable $19, long-term debt $200. Merck paid $1,600 cash for this

company.

(continued on next page)

10 Intangible asset amortization was $990. Please record this amortization.

11 Let's talk about something new, Deferred Income Taxes, shown as a liability on Merck's balance sheet.

Deferred income taxes are created when there are timing differences between when a revenue or expense is

recognized by a company on its financial statements and when the item is taxable as income or an expense

for tax purposes. Overall the income or expense will be the same for both tax and financial statement

purposes; the difference is the year in which it is shown as a revenue or expense for financial

purposes will differ from when it is expensed or a revenue for tax purposes. When Deferred income taxes

is an asset, it means that there are future tax benefits due to these timing differences. When Deferred

income taxes is a liability, it means that there will be additional taxes to be paid in the future due to these

timing differences. Okay, enough about that. Assume that the 2019 tax return (form 1120) was filed,

and that it was determined that due to timing differences, the Deferred income tax liability should

increase $30. Please record this, and record the income statement effect in Taxes on Income.

12 Pharmaceutical sales of $3,800 were made, for cash. Cost of the items sold was $800.

13 Wages were paid, $570, cash.

14 Cash dividends paid were $3,400. $1,587 was liquiditing the Dividends payable on the balance sheet (this is

a dividend that was declared sometime earlier but not paid at that time) and the rest was this year's

declared dividend and is a reduction of retained earnings.

15 Paid Loans payable and current portion of long-term debt of $1,000, plus interest on these loans of

$200, total cash paid was $1,200.

1 2 3 5 6 7 8 9 10 11 12 13 14 15 $ $ 9,676 774 6,778 5,978 4,277 27,483 1,469 Updated $ 9,676 $ 774 $ 6,778 $ 5,978 $ $ 4,277 27,483 1,469 343 11,989 15,394 5201 5,013 32,739 17,686 17 ERC 16 15,053 19,425 14,196 6,771 Balance Sheet December 31, 2019 (Amount in &millions) ASSETS Current Assets Cash and cash equivalents Cach Short-term investments Accounts receivable (net of allowance for doubtful accounts of $86) Inventories Other Other current assets Total Current Assets Investments Property and equipment (at cost) Land Buildings Mac Machinery, equipment and office furnishings Constri Construction in progress Total Investments Less - accumulated depreciation Total revenue from investmetns and depreciation Goodwill Other Intangibles, Net Other Assets Total Assets LIABILITIES AND EQUITY Current Liabilties Loans payable and current portion of long-term debt Trade accounts payable Accrued and other current liabilities Income taxes payable Divident payable Total Current Liabilities Long-Term Debt Deferred Income Taxes Other Noncurrent Liabilities Merck & Co, Inc. Stockholders' Equity Common stock, 5.50 par value Other paid-in capital Retained earnings Accumulated other comprehensive loss Total current stockholders equity Lesstreasury stock, at cost, 1,038,087,496 shares Total Merck & Co, Inc. stockholders' equity Noncontrolling interests Total Equity Total liabilities and equity 343 11,989 16-20 15,394 5,013 32,739 42100 17,686 15,053 10205 19,425 14,196 6,771 84,397 $ $ 84,397 $ 3,610 3,738 12,549 736 730 1,587 22,220 22,736 1,470 11,970 $ $ $ $ S $ 3,610 3,738 12,549 736 730 1.587 22,220 22,736 1,470 11,970 1,788 39,660 46,602 (6,193) 81,857 55,950 25,907 94 26,001 84,397 1,788 39,660 46,602 (6,193) 81,857 55,950 25,907 94 26,001 84,397 1 2 3 4 5 6 7 8 9 10 11 11 12 13 14 15 Updated 46,840 $ 46,840 $ Merck & Co, Inc. Statement of Income Year ended December 31,2019 (Amount in Smillions) Sales Costs, expenses, and Other Cost of sales Selling, general and administrative Research and development Restructuring costs Other (income) expense, net Income Before Taxes Taxes on Income Net income Less: Net (loss) Income Attributable to Noncontrolling Interests Net Income attribute to Merck & Co, Inc. 14,112 10,615 9,872 638 139 11,464 1,687 9,777 (66) 9,843 14,112 10,615 9,872 638 139 11,464 1,687 9,777 (66) 9,843 Merck & Co, Inc. Statement of Retained Earnings Year ended December 31, 2019 Balance, December 31, 2018 Net income attributable to Merck & Co, Inc. Cash dividends declared on common stock Balance, September 28, 2018 1,788 9,843 (5,820) 5,811 1,788 9,843 (5,820) 5,811 $ $ question Journal entry categories (Statement of Income & Retained Earnings) Debit Credit 1 2 3 4 5 6 7 00 9 10 11 12 13 14 15 question Journal entry categories (balance sheet)w Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 2 3 5 6 7 8 9 10 11 12 13 14 15 $ $ 9,676 774 6,778 5,978 4,277 27,483 1,469 Updated $ 9,676 $ 774 $ 6,778 $ 5,978 $ $ 4,277 27,483 1,469 343 11,989 15,394 5201 5,013 32,739 17,686 17 ERC 16 15,053 19,425 14,196 6,771 Balance Sheet December 31, 2019 (Amount in &millions) ASSETS Current Assets Cash and cash equivalents Cach Short-term investments Accounts receivable (net of allowance for doubtful accounts of $86) Inventories Other Other current assets Total Current Assets Investments Property and equipment (at cost) Land Buildings Mac Machinery, equipment and office furnishings Constri Construction in progress Total Investments Less - accumulated depreciation Total revenue from investmetns and depreciation Goodwill Other Intangibles, Net Other Assets Total Assets LIABILITIES AND EQUITY Current Liabilties Loans payable and current portion of long-term debt Trade accounts payable Accrued and other current liabilities Income taxes payable Divident payable Total Current Liabilities Long-Term Debt Deferred Income Taxes Other Noncurrent Liabilities Merck & Co, Inc. Stockholders' Equity Common stock, 5.50 par value Other paid-in capital Retained earnings Accumulated other comprehensive loss Total current stockholders equity Lesstreasury stock, at cost, 1,038,087,496 shares Total Merck & Co, Inc. stockholders' equity Noncontrolling interests Total Equity Total liabilities and equity 343 11,989 16-20 15,394 5,013 32,739 42100 17,686 15,053 10205 19,425 14,196 6,771 84,397 $ $ 84,397 $ 3,610 3,738 12,549 736 730 1,587 22,220 22,736 1,470 11,970 $ $ $ $ S $ 3,610 3,738 12,549 736 730 1.587 22,220 22,736 1,470 11,970 1,788 39,660 46,602 (6,193) 81,857 55,950 25,907 94 26,001 84,397 1,788 39,660 46,602 (6,193) 81,857 55,950 25,907 94 26,001 84,397 1 2 3 4 5 6 7 8 9 10 11 11 12 13 14 15 Updated 46,840 $ 46,840 $ Merck & Co, Inc. Statement of Income Year ended December 31,2019 (Amount in Smillions) Sales Costs, expenses, and Other Cost of sales Selling, general and administrative Research and development Restructuring costs Other (income) expense, net Income Before Taxes Taxes on Income Net income Less: Net (loss) Income Attributable to Noncontrolling Interests Net Income attribute to Merck & Co, Inc. 14,112 10,615 9,872 638 139 11,464 1,687 9,777 (66) 9,843 14,112 10,615 9,872 638 139 11,464 1,687 9,777 (66) 9,843 Merck & Co, Inc. Statement of Retained Earnings Year ended December 31, 2019 Balance, December 31, 2018 Net income attributable to Merck & Co, Inc. Cash dividends declared on common stock Balance, September 28, 2018 1,788 9,843 (5,820) 5,811 1,788 9,843 (5,820) 5,811 $ $ question Journal entry categories (Statement of Income & Retained Earnings) Debit Credit 1 2 3 4 5 6 7 00 9 10 11 12 13 14 15 question Journal entry categories (balance sheet)w Debit Credit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15