The following information is provided for adjustments prior to closing the books. Conner and Martin ask you to enter the adjustments into the spreadsheet, in the two columns to the right of the unadjusted trial balance. (CM2 uses a perpetual inventory system.)

Wages earned by employees during December and to be paid in January are $33,875; associated payroll taxes on these wages are $2,710.

On July 1, a client paid CM2 $205,720 in advance for a year of consulting services.

You discover that a product sale was made and recorded in December for $128,600; the product had not yet been shipped. The cost of the product was $68,742.

Bad debt expense has been calculated to be $17,508 but has not yet been recorded.

The Prepaid Expense account has a balance of $22,774. This balance includes $11,200 for a two-year insurance policy purchased on January 1, 2012.

Depreciation expense for the year is $82,620.

Interest expense accrued on its long-term liabilities is $7,765.

On December 15, CM2 declared a dividend of $110,000, to be paid on January 15, 2013.

Income tax expense is $201,109.

Record Adjusting J/Es and Adjusted Balance with the Journal provided.

General Ledger Account Name		Unadj. Balance 12/31/12			12/31/12 Adjusting J/Es			Adjusted Balance 12/31/12
Balance Sheet Accounts	Debit		Credit	Debit	JE#	Credit	Debit		Credit
Cash and cash equivalents	72,337
Accounts Receivable	910,680
Allowance for doubtful accounts			84,962
Inventory	1,272,160
Prepaid expenses	22,774
Other Current Assets	16,063
Building	874,418
Equipment and furniture	336,983
Land	348,791
Accum Depr			656,465
Investments	140,186
Goodwill	397,740
Other intangible assets	253,900
Accounts Payable			1,169,343
Dividends payable
Interest payable			5,100
Unearned revenue			205,720
Wages payable			81,350
Payroll taxes payable			8,850
Income tax payable
Long term liabilities			588,500
Common Stock			920,000
Paid-in capital common stock			105,000
Treasury Stock	400,000
Retained Earnings			0
Dividends
Net Income (Loss)			681,673
	5,046,032		4,506,963

Journal:

	Wage Expense	33,875.00
	Payroll Taxes Expense	2,710.00
	Wages Payable		33,875.00
	Payroll taxes payable		2,710.00
	Unearned Revenue	102,860.00
	Service Revenue		102,860.00
	Sales Revenue	128,600.00
	Inventory	68,742.00
	Account Receiveable		68,742.00
	Cost of Goods Sold		128,600.00
	Bad Debt Expense	17,508.00
	Allowance for Doubtful Accounts		17,508.00
	Insurance Expense	5,600.00
	Prepaid Expense		5,600.00
	Depreciation Expense	82,620.00
	Accumulated Depreciation		82,620.00
	Interest Expense	7,765.00
	Interest Payable		7,765.00
	Retained Earnings	110,000.00
	Dividend Payable		110,000.00
	Income Tax Expense	201,109.00
	Income Tax Payable		201,109.00