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Prepare adjusting entries for patent and for capitalization of machine repair:On December 31, 20XX, the company repaired a packaging machine at cost of $27,000.00. It

Prepare adjusting entries for patent and for capitalization of machine repair:On December 31, 20XX, the company repaired a packaging machine at cost of $27,000.00. It is expected that the repair will extend the life of the machine by four years. No depreciation is necessary this year. The company spent $50,000 to obtain and defend a patent for its formula for dog treats. The patent took effect on 1/1/20XX and provides 20 years of protection. The $50,000 amount was incorrectly charged to Misc. Expense

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Adjusting entries Dr Cr Cr 265,000.00 Cash Marketable Securities Accounts Receivable Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Misc. Supplies Land Building Baking Equipment As of December 31, 2017 Dr Cr 1,488,999.34 5,500,000.00 7,092,495.88 1,605,098.52 128,152.63 71,877.07 207,834.14 17,647.42 250,000.00 1,250,000.00 2,254,140.00 Dr 1,488,999.34 5,235,000.00 7,092,495.88 1,605,098.52 128,152.63 71,87707 207,834.14 17,647.42 250,000.00 1,250,000.00 2,360,730.00 1 1 106,590.00 328,282.00 328,282.00 Accumulated Depreciation Patent Accounts Payable Wages Payable Interest Payable Current Portion of Bonds Payable Income Taxes Currently Payable Accrued Pension Liability Accrued Employees Health Insurance Lease Liability 1,555,212.85 250,203.31 21,888.22 1,000,000.00 1,042,118.16 1,555,212.85 250,203.31 21,888.22 1,000,000.00 989,792.91 107,041.70 43,718.91 86,590.00 52,325.25 107,041.70 43,718.91 106,590.00 20,000.00 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 50,000.00 5,250,000.00 33,881,157.15 124,795.80 1 20,000.00 1 1 Deferred Tax Liability Bonds Payable 4,000,000.00 Preferred Stock 500,000.00 Common Stock 1,750,000.00 Beginning Retained earnings 2,213,122.59 Dividends - Preferred 50,000.00 Dividends - Common 5,250,000.00 Bakery Sales 33,881,157.15 Merchandise Sales 124,795.80 Cost of Goods Sold - Bakec 10,954,907.36 Cost of Goods Sold - Merch 88,994.79 Rent Expense 1,576,731.95 Wages Expense 2,604,526.23 Misc. Supplies Expense 263,224.56 Repairs and Maintenance 47,353.05 Business License Expense 211,757.65 Misc. Expense 141,171.08 Depreciation Expense 634,520.00 Insurance Expense 112,937.69 Advertising Expense 160,413.49 Interest Expense 484,703.27 Telephone Expense 50,821.34 Pension Expense Retired Employees Health Ins. Patent Amortization Income Tax Expense Unrealized Gain/(Loss) on Marketable Securities Held for Sale Income Taxes 4,168,472.62 Deferred Tax Expense 10,954,907.36 88,994.79 1,556,731.95 2,604,526.23 263,224.56 47,353.05 211,757.65 141,171.08 634,520.00 112,937.69 160,413.49 484,703.27 50,821.34 107,041.70 43,718.91 107,041.70 43,718.91 1 375.00 375.00 265,000.00 265,000.00 375.00 4,168,847.62 (52,325.25) 52,325.25 46.666,780.08 46.666.780.08 595,050.86 595,050.86 46,852, 180.44 46,852, 180,44

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