step 2:Record the 11 adjusting journal entries based on the additional information given.Record all AJE's on the Excel spreadsheet using the tab at the bottom of the spreadsheet labeled "AJEs and Closing Entries".Post each debit and credit of the AJE 's to the Trial Balance (second tab at the bottom of spreadsheet) in the two columns labeled AJE's (Columns E & G). CMC uses a perpetual inventory system which means that when they record the sale of a product (at the selling price), they also update COGS and Inventory (at cost).This requires two journal entries:(1) record the sale by debiting A/R and crediting Sales Revenue for the selling price.(2) Debit COGS and credit Inventory @ costRecommendation:use cell referencing when posting to the Trial Balance to eliminate potential typos and follow-through errors.

Step 3:Once all AJE's have been recorded & posted to the Trial Balance, check your work with the"CHECK FIGURES FOR CASE 1".If your Trial Balance agrees with these Check Figures, you are ready to move on to Step 4.

Step 4:Record the (5) Closing entries on the first tab labelled "AJE's & Closing".Post to the Trial Balance in columns K & M.

Step 5:Complete the Comprehensive Income Statement (CMC reports Comprehensive Income on a separate statement) and the Statement of Stockholder's Equity in good form.The Statement of Stockholder's Equity should reconcile with the SHE portion of your balance sheet which is automatically updated for you. (Use cell referencing to link the appropriate cells from the other financial statements.Keep in mind that not all cells on the Statement of Stockholder's Equity will require any updates.For example, no new stock was issued during 20x1; the balance in the contributed capital accounts will therefore not change.)

Additional Information to use in recording the necessaryAdjusting Journal Entries (AJE's):

1.As of December 31^st, wages of $45,700 should be accrued; associated payroll taxes on these wages are $2,910. (Record in two separate adjusting entries.The payroll taxes are an expense to the company for unemployment benefits and recorded as a payable to the state & federal taxing authority.)

2. The Unearned Consulting Revenue account has a balance before adjustment of $261,220 as of December 31, 20x1. Of this balance, 70% of the work was completed by year end.

3.You discover that a sale of a product was made on account and CMC recorded the sale in December for $136,200. However, the product has not yet been shipped, therefore it is not considered to be "delivered to the customer." The cost of the product was 55% of its selling price.CMC uses the perpetual inventory method.\

Excel File Edit View Insert Format Tools Data a Window Help 46% Tue 2:01 PM Q DE 340-Case1-AcctCycle-SV-20b (3) Q - Search Sheet 9 Home Insert Page Layout Formulas Data Review View Acrobat "+ Share ^ Arial 12 - A- A = = = Number Insert E * Delete Paste ~ % .00 .0 $.0 Conditional Format Cell Styles Format Sort & Create and Share Formatting as Table Filter Adobe PDF 513 X v fx A B C D E F G H K L M N O P Q R S T U V W General Ledger Account Name Trial Balance Before Adj 12/31/x AJEs at 12/31/x1 Trial Balance After Adj 12/31/x1 Closing Entries Post-Closing T/B 12/31/x1 Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash and cash equivalents 92,063 92 063 92,063 Accounts Receivable 913,780 913,780 913,780 5 Allowance for doubtful accounts 29,462 29,462 29,462 6 Interest Receivable 3,500 3,500 3,500 7 Inventory 1.270,160 1,270,160 1,270,160 8 Prepaid expenses 26,774 26,774 26,774 9 Other Current Assets 16,063 16,063 16,063 10 Investments 60,500 160,500 160,500 Fair Value Adjustment 0 0 0 0 0 12 Notes Receivable 220,000 220,000 220,000 13 Building 876,418 876,418 876,418 14 Equipment and furniture 332,983 332,983 332,983 15 Land 348,791 348,791 348,791 16 Accum Depr 656,465 656,465 656,465 17 Goodwill 493,951 493,951 493,951 18 Patents 217,000 217,000 217,000 Accounts Payable 1.169,343 1,169,343 1,169,343 20 Dividends payable 0 0 21 Interest payable 42,102 42,102 42,102 22 Unearned Consulting Revenue 261,220 261,220 261.220 23 Wages payable 81,350 31,350 81,350 24 Payroll taxes payable 8,850 8,850 8,850 25 Income tax payable 26 Long term liabilities 701,700 701,700 701,700 27 Common Stock 920,000 320,000 920,000 28 Paid-in capital common stock 105,000 105,000 105,000 29 Treasury Stock 400,000 400,000 400,000 0 Retained Earnings 539,069 539,069 539,069 1 Dividends 2 Accum Other Comprehensive Income 0 33 Sales revenue 9,253,346 9,253,346 9,253,346 34 Service revenue 1,169,385 1,169,385 1,169,385 35 Interest Revenue 36 Sales returns 162,400 162,400 162,400 37 Sales discounts 269,662 269,662 269,662 38 Product cost of goods sold 5,384,590 5,384,590 5,384,590 AJE's and Closing Entries Trial Balance Balance Sheet Income Statement Comprehensive Inc Stmt SHE Stmt + Ready + 82% JUN 23 2 W X HHHExcel File Edit View Insert Format Tools Data a Window Help 46% Tue 2:01 PM Q DE 340-Case1-AcctCycle-SV-20b (3) Q - Search Sheet 9 Home Insert Page Layout Formulas Data Review View Acrobat "+ Share ^ Arial 12 - A- AY = Insert = Number E Delete Paste BI UT TM. A. E % 100 Conditional Format Cell Sort & Create and Share Formatting as Table Styles Format Filter Adobe PDF 513 X v fx B C D E F G H K L M N O P Q R S T U V W 27 Common Stock 920,000 920,000 920,000 18 Paid-in capital common stock 105,000 105,000 105,000 9 Treasury Stock 400,000 400,000 400,000 10 Retained Earnings 539,069 539,069 539,069 31 Dividends 0 32 Accum Other Comprehensive Income 0 33 Sales revenue 9.253,346 9.253,346 9,253,346 34 Service revenue 1.169,385 1.169,385 1,169,385 35 Interest Revenue 0 36 Sales returns 162,400 162.400 162,400 37 Sales discounts 269,662 269,662 269.662 38 Product cost of goods sold 6,384,590 5,384,590 5,384,590 39 Service cost of goods sold 570,811 570,811 570,811 40 Advertising Expense 159,080 159,080 159,080 41 Bad debt expense 0 42 Depreciation and amortization 0 43 Professional Dues & subscriptions 21,470 21,470 21,470 44 Gain/loss on disposal 4,790 4,790 4,790 45 Income tax expense 0 0 0 46 Insurance Expense 30,144 BO,144 80,144 47 Interest expense 42,102 42,102 42,102 48 Legal and accounting fees 106,650 106,650 106,650 49 Miscellaneous 9.048 9,048 9,048 50 Office expense 220,114 220,114 220,114 1 Payroll taxes 136,975 136,975 136,975 62 Property taxes 104.570 104.570 104.570 53 Repair and maintenance 42,028 42,028 42,028 54 Research and development 70,680 470,680 470,680 55 Telephone 20,085 20,085 20,085 56 Travel and entertainment 38,391 38,391 38,391 57 Utilities Expense 47,049 47.049 47,049 58 Wage Expense 964,670 964,670 964,670 59 Salaries - Officers 710,000 710,000 710,000 0 Income Summary 0 0 61 Unrealized Gain/Loss-AFS 0 62 14,937 292 14,937 292 0 14,937 292 14,937 292 0 14,937 292 14,937 292 64 AJE's and Closing Entries Trial Balance Balance Sheet Income Statement Comprehensive Inc Stmt SHE Stmt + Ready + 82% JUN 23 2 W X HHHHExcel File Edit View Insert Format Tools Data a Window Help 46% Tue 2:02 PM Q DE 340-Case1-AcctCycle-SV-20b (3) Q - Search Sheet 9 Home Insert Page Layout Formulas Data Review View Acrobat "+ Share ^ Arial 12 - A- AY = Number Insert = E Delete Paste BI UTY. A. E ~ % .00 $.0 Conditional Format Cell Create and Share Formatting as Table Styles Format Sort & Filter Adobe PDF M15 X V fx B C D E F G H I J K L M N 0 P Q R S T U V W X Y Z CM Corporation Balance Sheet for the periods ended December 31, 20x1 December 31, 20x0 Assets $92,063 $120,670 913,780 516,454 (29,462) (24,975) 1,270,160 95,960 3,500 3,500 26,774 14,574 16,063 8,879 Total current assets 2,292,878 1,435,062 160,500 160,500 0 220,000 48,000 1,558,192 1,200,255 (656,465) (591,965) Net fixed assets 901,727 608,290 493,951 98,440 217,000 98,000 710,951 196,440 Total assets $4,286,056 $2,287,792 Liabilities and Stockholders' Equity $1,169.343 $315,395 0 48.000 AJE's and Closing Entries Trial Balance Balance Sheet Income Statement Comprehensive Inc Stmt SHE Stmt + Ready + 80% JUN 23 2 W X HHHH WExcel File Edit View Insert Format Tools Data a Window Help 46% Tue 2:02 PM Q DE 340-Case1-AcctCycle-SV-20b (3) Q - Search Sheet 9 Home Insert Page Layout Formulas Data Review View Acrobat "+ Share ^ Insert Arial 12 . A- AY = = Number E Delete Paste BI UT Y. A. E ~ % .00 $.0 Conditional Format Cell Format Sort & Create and Share Formatting as Table Styles Filter Adobe PDF M15 X V fx B C D E F G H I J K L M N P Q R S T U V W X Y Z Total assets $4,286,056 $2,287.792 Liabilities and Stockholders' Equity $1,169,343 $315,395 0 48,000 261.220 108 220 42,102 6,500 31,350 78,200 8,850 9,033 0 279,850 Total current liabilities 1,562,865 845,198 701,700 278,525 920,000 920,000 105,000 105,000 Total contributed capital 1,025,000 1,025,000 1,396,491 539,069 0 (400,000) 0 1882889888 (400,000) Total stockholders' equity 2,021,491 1,164,069 Total liabilities and stockholders' equity $4,286,056 $2,287.792 AJE's and Closing Entries Trial Balance Balance Sheet Income Statement Comprehensive Inc Stmt SHE Stmt + Ready + 80% JUN 23 2 W X HHHH WExcel File Edit View Insert Format Tools Data Window Help M B 46% Tue 2:02 PM Q DE 340-Case1-AcctCycle-SV-20b (3) Q - Search Sheet 9 Home Insert Page Layout Formulas Data Review View Acrobat "+ Share ~ Insert E Arial 12 - A- A- = = 1 = Number * Delete Paste $ ~ % ) .00 Conditional Format Cell Sort & Create and Share Formatting as Table Styles Format Filter Adobe PDF P16 X V fx # B C D E F G H K L M N 0 P Q R S T U v w X Y Z AA AB AC AD 8 Revenue Net product sales revenue $8 821,284 $6.984,852 10 Service revenue 1,189,385 975.860 11 Total revenue $9.990,659 $9.960,712 12 Cost of goods sold 13 Products 5,384,590 5,356,018 14 Services 570,811 445,637 15 Total cost of sales 5,955,401 5,801.655 15 |Gross profit 4,035,268 4, 159.057 17 18 Operating expenses 19 Advertising 159,080 123,869 20 Bad debt expense 0 28.640 Depreciation and amortization 0 125,500 22 Dues and subscriptions 21,470 19.730 23 Insurance 30.144 90.144 24 Legal and accounting fee: 106,650 87.650 25 Miscellaneous 9.048 12.010 26 Office expense 120,114 214,138 27 Payroll taxes 136,975 131,170 26 Property laxes 04,570 93.400 29 Repair and maintenance 42,028 37.543 30 Research and development 470,680 278,000 Telephone 20.085 21.085 32 Travel and entertainment 38,391 60.402 33 Utilities 47.049 37,876 964,670 954,68 35 Wages - Employees Salaries - Officers 10,000 350,000 3,130,954 2,985,845 37 Total operating expenses 38 Income (loss) from operations 904,314 1,193,212 39 40 Other income and (expense) 41 Interest experise 42,102) (27,800) 42 Gain (loss) on disposal of assets (4,790) 26,950) 43 Interest Revenue 9,230 44 Total other income (expense) (46,892) (45,520) 45 46 Income (loss) before income taxes 857,422 1,147,692 401,692) 4B 47 Income tax (expense) benefit 49 Net income (lass) $857,422 $746,000 AJE's and Closing Entries Trial Balance Balance Sheet Income Statement Comprehensive Inc Stmt SHE Stmt + Enter + 70% JUN 23 2 W X HUHExcel File Edit View Insert Format Tools Data a Window Help 45% Tue 2:02 PM Q DE 340-Case1-AcctCycle-SV-20b (3) Q - Search Sheet 9 Home Insert Page Layout Formulas Data Review View Acrobat "+ Share ^ Insert Arial 12 - A- AY = = Number E * Delete Past BI UTY. A. $E * % 100 .00 Conditional Format Cell Sort & Formatting as Table Styles Format Create and Share Filter Adobe PDF B1 X fx A B C D E F G H J K L M CM Corporation Statement of Stockholder's Equity as of December 31, 20x1 Accumulated Total Common Additional Treasury Retained Other Comprehensive Stockholder's Equity Stock Paid-In Capital Stock Earnings Income Co Beg. Balance, 1/1/x1 $ 1, 164,069 $ 920,000 $ 105,000 $ (400,000) $ 539,069 Common Stock Issued 10 Common Stock Repurchased 11 Net Income ('x1) 12 Other Comprehensive Income ('x1) 13 Dividend (x1) 14 15 End. Balance, 12/31/x1 $ 1,164,069 $ 920,000 $ 105,000 $ (400,000) $ 539,069 $ 16 17 18 19 20 21 22 AJE's and Closing Entries Trial Balance Balance Sheet Income Statement Comprehensive Inc Stmt SHE Stmt + Ready + 100% JUN 23 2 W X