You are the chief financial officer of SweetChoco Ltd., a public Canadian company, with fiscal

year end on December 31. For the year 2014, you have the following unadjusted trial balance

and the following information that you must consider before presenting the financial statements

to the Board of Directors for approval.

Additional information:

(1)

No depreciation has been recorded for 2014. The companys buildings are recognized

using the cost model, depreciated on a straight-line basis with no residual value, and were

acquired on January 1st, 2009.

(2)

On June 1, 2014, the company paid $3,600 in advance for 18 months of rent in its new

office space. The whole amount was expensed.

(3)

At the board meeting on December 20, 2014, the directors decided that in early February

2015 the company will distribute dividends of $0.03 per common share. You know that

the company has 200,000 common shares outstanding.

(4)

On December 10, 2014, the company recorded $3,250 in revenue from a shipment of

black chocolate. As at December 31, 2014, the black chocolate had not yet left the

warehouse.

(5)

The management estimates that $255 of Accounts Receivable will be uncollectible.

(6)

The company has a professional subscription to two magazines. On March 1, 2012, the

company paid $4,050 for a 3-year subscription to The World of Chocolate. On August

31, 2014, the company paid $2,400 for a 2-year subscription to the Chocolate Review

magazine.

(7)

You remember that the junior accountant had sent you an e-mail telling you that on

December 15, 2014, he incorrectly recorded an invoice for $110 from the companys

advertising and marketing partner as Delivery and Transport expense.

(8)

The loan from the bank was obtained on December 1st, 2014, at an interest rate of 12%.

The loan will be repaid in annual equal installments of $2,000, the first of which will be

made on November 30, 2015.

Required:

Prepare the adjusting and correcting entries.

Credit Debit 50,000 15,000 4,000 32,355 7,250 21,000 3,310 8,000 6,900 100,000 December 31, 2014 Land Buildings Patent Cash in bank Accounts receivable Inventory Accounts payable Loan from bank Bond Investment Share capital FV-OCI Investments Allowance for doubtful accounts Prepaid subscription Sales revenue Sales discounts Accumulated depreciation - buildings Salaries and wages expenses Cost of goods sold Delivery and transport expenses Retained earnings | Advertising expense Rent expense 2.300 130 3,975 200,000 5.000 5,000 31,000 165,000 510 30,000 | 750 3,600