Selected transactions completed by Kornett Company during its first fiscal year ended December 31,20Y8, were as follows: Jan. 3 Issued a check to establish a petty cash fund of $4,500. Feb. 26 Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $1,680; miscellaneous selling expense, $570; miscellaneous administrative expense, $880. Apr. 14 Purchased $31,300 of merchandise on account, terms, n/30. The perpetual inventory system is used to account for inventory. May 13 Paid the invoice of April 14. 17 Received cash from daily cash sales for $21,200. The amount indicated by the cash register was $21,240. Jun. 2 Received a 60-day, 8% note for $180,000 on the Ryanair account. Aug. 1 Received amount owed on June 2 note plus interest at the maturity date. Assume a 360-day year. 24 Received $7,600 on the Finley account and wrote off the remainder owed on a $9,000 accounts receivable balance. (The allowance method is used in accounting for uncollectible receivables.) Sep. 15 Reinstated the Finley account written off on August 24 and received $1,400 cash in full payment. (Record as two entries.) Record the following on journal page 22. Sep. 15 Purchased land by issuing a $670,000,90-day note to Zahorik Co., which discounted it at 9%. Assume a 360-day year. Oct. 17 Sold office equipment in exchange for $135,000 cash plus receipt of a $100,000,90-day, 9% note. The equipment had a cost of $320,000 and accumulated depreciation of $64,000 as of October 17. Nov. 30 Journalized the monthly payroll for November, based on the following data: Salaries: \begin{tabular}{|l|l|} \hline Sales salaries & $135,000 \\ \hline Office salaries & 77,250 \\ \hline & $212,250 \\ \hline \hline \end{tabular} Deductions: \begin{tabular}{|l|c|} \hline Federal income tax withheld & $39,266 \\ \hline Social security tax withheld & 12,735 \\ \hline Medicare tax withheld & 3,184 \\ \hline \end{tabular} Unemployment Tax rates: \begin{tabular}{|l|l|} \hline State unemployment & 5.4% \\ \hline Federal unemployment & 0.6% \\ \hline \end{tabular} Amount subject to unemployment taxes: 30 Journalized the employer's payroll taxes on the payroll. Dec. 14 Journalized the payment of the September 15 note at maturity. 31 The pension cost for the year was $190,400, of which $139,700 was paid to the pension plan trustee. Required: 1. Journalize the selected transactions, starting on page 21 of the journal. * 2. Based on the following data, prepare a bank reconciliation for December of the current year:** 1. Journalize the selected transactions, starting on page 21 of the journal. * 2. Based on the following data, prepare a bank reconciliation for December of the current year: a. Balance according to the bank statement at December 31,$283,000. b. Balance according to the ledger at December 31,$245,410. c. Checks outstanding at December 31,$68,540. d. Deposit in transit, not recorded by bank, $29,500. e. Bank debit memo for service charges, $750. f. A check for $12,700 in payment of an invoice was incorrectly recorded in the accounts as $12,000. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. "Add." or "Deduct:" will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions. Enter all amounts as positive numbers. 3. Based on the bank reconciliation prepared in (2), journalize the entry or entries to be made by Kornett Company on page 23 of the journal. Kornett Company uses the Miscellaneous Administrative Expense account for bank service charges. * 4. Based on the following selected data, journalize the adjusting entries as of December 31,20Y8 on page 23 of the journal:* Kornett Company uses the Miscellaneous Administrative Expense account for bank service charges. 4. Based on the following selected data, journalize the adjusting entries as of December 31,20Y8 on page 23 of the journal:* Estimated uncollectible accounts at December 31,$16,000, based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts at December 31 was $2,000 (debit). a. The physical inventory on December 31 indicated an inventory shrinkage of $3,300. b. Prepaid insurance expired during the year, $22,820. c. Office supplies used during the year, $3,920. d. Depreciation is computed as follows: f. A patent costing $48,000 when acquired on January 2 has a remaining legal life of 10 years and is expected to have value for eight years. f. A patent costing $48,000 when acquired on January 2 has a remaining legal life of 10 years and is expected to have value for eight years. g. The cost of mineral rights was $546,000. Of the estimated deposit of 910,000 tons of ore, 50,000 tons were mined and sold during the year. h. Vacation pay expense for December, $10,500. i. A product warranty was granted beginning December 1 and covering a one-year period. The estimated cost is 4% of sales, which totaled $1,900,000 in December. j. Interest was accrued on the note receivable received on October 17. Assume a 360-day year. *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. 5. Based on the following information and the post-closing trial balance that follows, prepare a balance sheet in report form at December 31 of the current year. Be sure to complete the heading of the balance sheet. Enter assets in the order in which they appear in the post-closing trial balance. Refer to information given in the problem and the Labels and Amount Descriptions list for exact wording of text entries. There is no need to include "(current portion)" or a due date with any account titles. "Less" or "Add and a colon (:) will automatically appear if it is require . Enter all amounts as positive numbers. The merchandise inventory is stated at cost by the LIFO method. The product warranty payable is a current liability. Vacation pay payable: Current liability $7,140 Long-term liability 3,360 The unfunded pension liability is a long-term liability. Notes payable: Current liability Long-term liability 630,000 Kornett Company POST-CLOSING TRIAL BALANCE December 31, 20Y8 \begin{tabular}{|r|l|r|r||} \hline 9 & Office Supplies & 13,390.00 & \\ \hline 10 & Land & 654,925.00 & \\ \hline 11 & Buildings & 900,000.00 & \\ \hline 12 & Accumulated Depreciation-Buildings & & \\ \hline 13 & Office Equipment & & 36,000.00 \\ \hline 14 & Accumulated Depreciation-0ffice Equipment & 246,000.00 & \\ \hline 15 & Store Equipment & & 44,000.00 \\ \hline 16 & Accumulated Depreciation-Store Equipment & 112,000.00 & \\ \hline 17 & Mineral Rights & & 5,000.00 \\ \hline 18 & Accumulated Depletion & 546,000.00 & \\ \hline 19 & Patents & & 30,000.00 \\ \hline 20 & Social Security Tax Payable & 42,000.00 & \\ \hline 21 & Medicare Tax Payable & & 25,470.00 \\ \hline 22 & Employees Federal Income Tax Payable & & 4,710.00 \\ \hline \end{tabular} Selected transactions completed by Kornett Company during its first fiscal year ended December 31,20Y8, were as follows: Jan. 3 Issued a check to establish a petty cash fund of $4,500. Feb. 26 Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $1,680; miscellaneous selling expense, $570; miscellaneous administrative expense, $880. Apr. 14 Purchased $31,300 of merchandise on account, terms, n/30. The perpetual inventory system is used to account for inventory. May 13 Paid the invoice of April 14. 17 Received cash from daily cash sales for $21,200. The amount indicated by the cash register was $21,240. Jun. 2 Received a 60-day, 8% note for $180,000 on the Ryanair account. Aug. 1 Received amount owed on June 2 note plus interest at the maturity date. Assume a 360-day year. 24 Received $7,600 on the Finley account and wrote off the remainder owed on a $9,000 accounts receivable balance. (The allowance method is used in accounting for uncollectible receivables.) Sep. 15 Reinstated the Finley account written off on August 24 and received $1,400 cash in full payment. (Record as two entries.) Record the following on journal page 22. Sep. 15 Purchased land by issuing a $670,000,90-day note to Zahorik Co., which discounted it at 9%. Assume a 360-day year. Oct. 17 Sold office equipment in exchange for $135,000 cash plus receipt of a $100,000,90-day, 9% note. The equipment had a cost of $320,000 and accumulated depreciation of $64,000 as of October 17. Nov. 30 Journalized the monthly payroll for November, based on the following data: Salaries: \begin{tabular}{|l|l|} \hline Sales salaries & $135,000 \\ \hline Office salaries & 77,250 \\ \hline & $212,250 \\ \hline \hline \end{tabular} Deductions: \begin{tabular}{|l|c|} \hline Federal income tax withheld & $39,266 \\ \hline Social security tax withheld & 12,735 \\ \hline Medicare tax withheld & 3,184 \\ \hline \end{tabular} Unemployment Tax rates: \begin{tabular}{|l|l|} \hline State unemployment & 5.4% \\ \hline Federal unemployment & 0.6% \\ \hline \end{tabular} Amount subject to unemployment taxes: 30 Journalized the employer's payroll taxes on the payroll. Dec. 14 Journalized the payment of the September 15 note at maturity. 31 The pension cost for the year was $190,400, of which $139,700 was paid to the pension plan trustee. Required: 1. Journalize the selected transactions, starting on page 21 of the journal. * 2. Based on the following data, prepare a bank reconciliation for December of the current year:** 1. Journalize the selected transactions, starting on page 21 of the journal. * 2. Based on the following data, prepare a bank reconciliation for December of the current year: a. Balance according to the bank statement at December 31,$283,000. b. Balance according to the ledger at December 31,$245,410. c. Checks outstanding at December 31,$68,540. d. Deposit in transit, not recorded by bank, $29,500. e. Bank debit memo for service charges, $750. f. A check for $12,700 in payment of an invoice was incorrectly recorded in the accounts as $12,000. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. "Add." or "Deduct:" will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions. Enter all amounts as positive numbers. 3. Based on the bank reconciliation prepared in (2), journalize the entry or entries to be made by Kornett Company on page 23 of the journal. Kornett Company uses the Miscellaneous Administrative Expense account for bank service charges. * 4. Based on the following selected data, journalize the adjusting entries as of December 31,20Y8 on page 23 of the journal:* Kornett Company uses the Miscellaneous Administrative Expense account for bank service charges. 4. Based on the following selected data, journalize the adjusting entries as of December 31,20Y8 on page 23 of the journal:* Estimated uncollectible accounts at December 31,$16,000, based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts at December 31 was $2,000 (debit). a. The physical inventory on December 31 indicated an inventory shrinkage of $3,300. b. Prepaid insurance expired during the year, $22,820. c. Office supplies used during the year, $3,920. d. Depreciation is computed as follows: f. A patent costing $48,000 when acquired on January 2 has a remaining legal life of 10 years and is expected to have value for eight years. f. A patent costing $48,000 when acquired on January 2 has a remaining legal life of 10 years and is expected to have value for eight years. g. The cost of mineral rights was $546,000. Of the estimated deposit of 910,000 tons of ore, 50,000 tons were mined and sold during the year. h. Vacation pay expense for December, $10,500. i. A product warranty was granted beginning December 1 and covering a one-year period. The estimated cost is 4% of sales, which totaled $1,900,000 in December. j. Interest was accrued on the note receivable received on October 17. Assume a 360-day year. *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. 5. Based on the following information and the post-closing trial balance that follows, prepare a balance sheet in report form at December 31 of the current year. Be sure to complete the heading of the balance sheet. Enter assets in the order in which they appear in the post-closing trial balance. Refer to information given in the problem and the Labels and Amount Descriptions list for exact wording of text entries. There is no need to include "(current portion)" or a due date with any account titles. "Less" or "Add and a colon (:) will automatically appear if it is require . Enter all amounts as positive numbers. The merchandise inventory is stated at cost by the LIFO method. The product warranty payable is a current liability. Vacation pay payable: Current liability $7,140 Long-term liability 3,360 The unfunded pension liability is a long-term liability. Notes payable: Current liability Long-term liability 630,000 Kornett Company POST-CLOSING TRIAL BALANCE December 31, 20Y8 \begin{tabular}{|r|l|r|r||} \hline 9 & Office Supplies & 13,390.00 & \\ \hline 10 & Land & 654,925.00 & \\ \hline 11 & Buildings & 900,000.00 & \\ \hline 12 & Accumulated Depreciation-Buildings & & \\ \hline 13 & Office Equipment & & 36,000.00 \\ \hline 14 & Accumulated Depreciation-0ffice Equipment & 246,000.00 & \\ \hline 15 & Store Equipment & & 44,000.00 \\ \hline 16 & Accumulated Depreciation-Store Equipment & 112,000.00 & \\ \hline 17 & Mineral Rights & & 5,000.00 \\ \hline 18 & Accumulated Depletion & 546,000.00 & \\ \hline 19 & Patents & & 30,000.00 \\ \hline 20 & Social Security Tax Payable & 42,000.00 & \\ \hline 21 & Medicare Tax Payable & & 25,470.00 \\ \hline 22 & Employees Federal Income Tax Payable & & 4,710.00 \\ \hline \end{tabular}