The comptroller of ABC Incorporated has just won the lottery and was last seen with a 1-way ticket to Hawaii headed towards Pearson International Airport. The owners of ABC have found his unadjusted November 30, 2023 trial balance for the 11 months then ended (attached), and have also provided you with some additional information about ABC and the transactions which have occurred during December 2023. Your job is to:

1. Create a list of all entries required to: - account for December 2023, and - enter any yearend adjusting entries required for fiscal 2023 (indicate with an R if that entry needs to be reversed - you do not need to do closing entries).

Show each journal entry and write 1 sentence which describes it, (i.e. To record December 2023 revenues). Part-marks are available for incorrect solutions if you show your calculations / describe your reasoning. (Approximately 80% of available marks)

2. Create an adjusted December 31, 2023 trial balance, add new accounts as needed. (Approximately 20% of available marks)

ABCs owners have given the following information:

a) During December 2023 inventory with a cost of $130,000 was sold on account for $150,000 (assume a perpetual inventory system, not a periodic one). Cash collections for the same period were $165,000.

b) In addition to the above (not included in the $150,000 of sales) was one sale of inventory with a cost of $20,000 and a selling price of $30,000 where the credit manager predicted only a 10% chance of actually getting paid but the transaction was carried out anyway - the terms of the sale required payment in 60 days this amount has not yet been collected and is not yet overdue as at December 31. (Part marks available if you explain your reasoning.)

c) Upon review of the receivables at year end, management has indicted that a specific customer has gone bankrupt and won't be paying the $15,000 that they owe. A further $25,000 of the remaining receivables (not counting the sale described in b) will probably not be collected either. (Normally ABC only reviews their outstanding receivables at year end).

d) Inventory of $130,000 were purchased on account from suppliers. Later in the month ABC made a payment to its inventory suppliers in the amount of $100,000.

e) The owners declared and paid themselves a dividend of $2,000 in December. For tax planning purposes the owners have declared a bonus payable to themselves of $45,000. They aren't planning to make the actual payment until 2024.

f) Wages of $28,000 were paid (and automatically recorded in the GL) on December 8, and again on December 22. Wages of $28,000 will be paid again on January 5, 2024. (ABC operates every day not just Monday- Friday, assume no accruals were made in November, ignore the effects of any statutory holidays during this period.)

g) An annual insurance policy was purchased for $36,000 on June 1, 2023 and was fully expensed at that time.

h) All depreciation is straight-line at the following rates (no capital purchases were made during the year): i) Vehicles - 5 years ii) Equipment - 10 years iii) Computer hardware - 3 years

ABC Incorporated - Unadjusted Trial Balance 11 Months ended November 30,2023