There are 10 applicable adjusting entries that need to be made as of the end of the month based on the information provided above. When recording these adjusting entries consider the following facts:

1.) Interest expense will be recorded as a operating expense items on the income statement.

2.) Record the necessary adjusting entries related to pre-paid expense as separate journal entries.

3.) When reviewing the supply room as of the end of the month, Mason Automation noted that it had $3.6 Million worth of supplies still on hand.

4.) As of the end of the month, 2,500 cars were completed for Michael Scott Paper Company and the performance obligation had been met on those 2,500 cars. As such, revenue was determined to be earned on those 2,500 vehicles and it was noted that each vehicle costed $5,300 to manufacture. (These journal entries are considered 2 of the 10 total adjusting entries)

5.) Mason Automation uses the balance sheet approach in estimating the allowance for doubtful accounts as of the end of the period. Based on industry average, Mason noted that it will use 5.5% of receivables as an estimation.

Balance Sheet - Extra Information: 1.) When preparing the balance sheet, close out net income to retained earnings.

JE # Debit Account Credit Amount ($) Cash Credit Account Debit Amount ($) 400,000,000 Common Stock Paid in Capital in Excess of Par: Common Stock 20,000,000 380,000,000 2 No journal entry needed Treasury Stock 23,000,000 Cash 23,000,000 Cash Discount on Bonds Payable 97,000,000 3,000,000 Bonds Payable 100,000,000 Cash 50,000,000 Unearned Sales Rev 50,000,000 Inventory 253,000,000 Cash Accounts Payable 87,000,000 166,000,000 Accounts Recievable 207,000,000 Sales Revenue 207,000,000 Prepaid Rent 15,600,000 Cash 15,600,000 Supplies 5,000,000 Accounts Payable 5,000,000 10 Patent 21,000,000 Cash 21,000,000 11 Fixed Assets 170,000,000 Cash Accounts Payable 30,000,000 140,000,000 JE # Debit Account Credit Amount ($) Cash Credit Account Debit Amount ($) 400,000,000 Common Stock Paid in Capital in Excess of Par: Common Stock 20,000,000 380,000,000 2 No journal entry needed Treasury Stock 23,000,000 Cash 23,000,000 Cash Discount on Bonds Payable 97,000,000 3,000,000 Bonds Payable 100,000,000 Cash 50,000,000 Unearned Sales Rev 50,000,000 Inventory 253,000,000 Cash Accounts Payable 87,000,000 166,000,000 Accounts Recievable 207,000,000 Sales Revenue 207,000,000 Prepaid Rent 15,600,000 Cash 15,600,000 Supplies 5,000,000 Accounts Payable 5,000,000 10 Patent 21,000,000 Cash 21,000,000 11 Fixed Assets 170,000,000 Cash Accounts Payable 30,000,000 140,000,000