Scenario: You were recently hired by a $35 million manufacturing company ($35 million in sales) as the company staff accountant. The controller (your boss) has asked you to explain several accounting practices to the two existing members of the accounting staff. Note: The previous months financial statements (prepared just before you were hired) were incorrect. The Controller did not catch the errors before the incorrect financials were presented to the President. The Controller has become heavily involved in company operations (hoping to become the Chief Operating Officer) and does not have the time to carry out all the accounting responsibilities. It became clear last month that the company needed to hire an accountant with a four-year accounting degree (you). Required: Prepare a clearly written set of instructions for area the controller wants you to explain. The controller has provided some baseline information for you to incorporate into your instructions. You will be evaluated on how clear and complete the instructions are presented. The goal is for the accounting staff to fully understand the accounting how and why) after reading your instructions.

3. Year-end Adjustments Explain and provide examples of year-end adjustments. Include in your instructions the following example. What is the year-end adjustment accomplishing? Why is it necessary? What would the income statement impact be if the adjustment was not made? What is the balance sheet impact if the adjustment is not made? Include an explanation for the interest expense calculation. Date June 1, 2022 0 Description Airflowing Corp. purchased a truck for $ 85,000 from Ford Motor Company Fleet Sales Division The soles agreement coll for Aiflowing Corp. to pay $ 10,000 on purchase date and to sign o 1-yeor, 10% note for the remaining balance of the purchase price Debit Credit Truck $ 85,000 Notes payable $ 75,000 Cash $ 10,000 6/1/22 $ 4375 12/31/22 Interestexpense Year-end adjustment Interest payable $ 4375 3. Year-end Adjustments Explain and provide examples of year-end adjustments. Include in your instructions the following example. What is the year-end adjustment accomplishing? Why is it necessary? What would the income statement impact be if the adjustment was not made? What is the balance sheet impact if the adjustment is not made? Include an explanation for the interest expense calculation. Date June 1, 2022 0 Description Airflowing Corp. purchased a truck for $ 85,000 from Ford Motor Company Fleet Sales Division The soles agreement coll for Aiflowing Corp. to pay $ 10,000 on purchase date and to sign o 1-yeor, 10% note for the remaining balance of the purchase price Debit Credit Truck $ 85,000 Notes payable $ 75,000 Cash $ 10,000 6/1/22 $ 4375 12/31/22 Interestexpense Year-end adjustment Interest payable $ 4375