The unadjusted trial balance of Bramble Corp. a private company following ASPE, at December 31, 2020 is as follows Credit Debit $10.450 56,250 $704 Cash Accounts receivable Allowance for doubtful accounts FV-NI investments Inventory Prepaid insurance Prepaid rent FV-OCI investments Bond investment at amortized cost 9.000 58,000 2.868 13,704 14.550 16,000 11.900 105,500 Land Equipment Accumulated depreciation-equipment Accounts payable Bonds payable Common shares Retained earnings Sales revenue Rent revenue Purchases Purchase discounts Freight out Freight in Salaries and wages expense Interest expense Miscellaneous expense 17.400 8.100 60,000 104,600 90,093 221.700 10.200 170.500 2.500 9,000 4,000 27.500 5.200 875 $515.297 $515.297 Additional information: 1. 2 3. 5. On November 1.2020, Bramble received $10,200 rent from its lessee for a 12-month lease beginning on that date. This was credited to Rent Revenue. Bramble estimates that 7% of the Accounts Receivable balances on December 31, 2020, will be uncollectible. On December 28, 2020, the bookkeeper incorrectly credited Sales Revenue for a receipt of $1.150 on account. This error had not yet been corrected on December 31. After a physical count, inventory on hand at December 31, 2020, was $77,500. (Use "Inventory account for closing out the beginning inventory amount and recording the ending inventory amount.) Prepaid insurance contains the premium costs of two policies: Policy A. cost of $1,320, two-year term, taken out on April 1. 2020: Policy B. cost of $1,548, three-year term, taken out on September 1, 2020 The regular rate of depreciation is 10% of cost per year. Acquisitions and retirements during a year are depreciated at half this rate. There were no retirements during the year. On December 31, 2019, the balance of Equipment was $94.000 On April 1, 2020, Bramble issued at par value 60 $1,000, 12% bonds maturing on April 1, 2024. Interest is paid on April 1 and October 1 On August 1, 2020, Bramble purchased at par value 16 $1.000, 12% Marin Inc. bonds. maturing on July 31, 2022. Interest is paid on July 31 and January 31 On May 30, 2020, Bramble rented a warehouse for $1.142 per month and debited Prepaid Rent for an advance payment of $13.704 Bramble's FV-NI investments consist of shares with total market value of $9,380 as at December 31, 2020 The FV-OCl investment is an investment of 495 shares in Yop Inc. with current market value of $20 per share as of December 31, 2020 6. 7 B. 10. Prepare the year-end adjusting and correcting entries for December 31, 2020, using the information given. Record the adjusting entry for inventory using a cost of Goods Sold account. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account tities and enter for the amounts) No. Account Titles and Explanation Debit Credit 1. 2. To correct incorrect entry) (To record bad debt expense) 3. 4. 5 6. 7. 3. 9. 10 Indicate which of the adjusting entries could be reversed. Journal Entry 1 Journal Entry 2 Journal Entry 3
