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: 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 $90,000; delivered to the customer January 9. For the month of December, the company journalized $190,000 with a debit to "Accounts Receivable" and credit to "Sales". Ignore the cost of Goods Sold & Inventory implications for this question). Inventory implications for this question). SITUATION 2: 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 $400,000. 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 $400,000. SITUATION 3: The company publishes a monthly magazine called the "Toronto Times". Subscribers to the magazine pay $120 for 12 monthly issues of the magazine. When the regular accountant was on vacation on December 30, the company had ten subscriptions ordered, all paid in full with cash (10 subscriptions multiplied by $120 = $1,200 cash received). The subscriptions begin with the January edition of the magazine. Because the accountant was on vacation at this time, the company receptionist was substituting. The receptionist prepared a journal entry of $1,200 for a debit to "Cash" and a credit to "Sales". SITUATION 4: 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 $90,000 in labour costs. The company debited an operating expense, "Labour Expense" and credited "Cash" when it paid the $90,000 in cash on December 30. Paragraph B IC