Question 3 (12 points) RECOMMENDED ADJUSTING JOURNAL ENTRIES 12 marks REQUIRED: Assuming a December 31 year-end for "the company", for each of the following four (4) independent situations, indicate: (a) the income statement and balance sheet accounts that are affected (b) whether these accounts are over- or understated, and (c) provide an adjusting entry to correct the misstatement, if required. Write your journal entry (if required) in the form of: Debit: Account Name $xxx Credit: Account Name $XXX SITUATION 1: On December 1, the company purchased a new piece of equipment for $950,000, the cost of which was debited to a new Fixed Asset "Equipment" and credited to "Accounts Payable". In order to bring this asset into a state of readiness for its intended use, the company paid $50,000 in labour costs. The company debited an operating expense, "Labour Expense" and credited "Cash" when it paid the $50,000 in cash on December 30. SITUATION 2: The company manages musicians who play at various corporate events. One of the musical groups is called "The Singers" who earn $1,000 for every event at which they play. The Singers played three events: one event on each of on December 28, Docomber 29 and lanuary 2. The company closed its offices from December 23 until X 0:00 Time Left:2:29:13 Ming Lu: Attempt 1 SITUATION 2: The company manages musicians who play at various corporate events. One of the musical groups is called "The Singers" who earn $1,000 for every event at which they play. The Singers played three events: one event on each of on December 28, December 29 and January 2. The company closed its offices from December 23 until January 3 of the following year. On January 2, the accountant returned to the office and debited "Music talent expenses" and credited "Music talent fees payable" for $3,000. SITUATION 3: The company owned a small plot of land near Barrie, Ontario which it purchased in 1997. The carrying value of the land was its original acquisition cost of $600,000. On December 30, the company sold the land for $1,000,000 in cash. To journalize the transaction, the company's accountant debited "Cash" and credited "Gain on Sale of Asset" for $1,000,000; then she debited "Cost of Goods Sold" and credited "Land" for $600,000 SITUATION 4: The company had two sales in the month of December, as follows: December 16: Sold one machine with Identification Number X123 for a price of $100,000; delivered to the customer December 30. December 18: Sold one machine with Identification Number Y456 for a price of $110,000; delivered to the customer January 9. For the month of December, the company journalized $210,000 with a debit to "Accounts Receivable and credit to "Sales". (Ignore the Cost of Goods Sold & Inventory implications for this question). .. Paragraph B I U