You have been assigned to examine the financial statements of Jordan, Inc. for the year ended December 31, 2020. You discover the following situations in February 2021. 1. The physical inventory count has been incorrectly counted resulting in the following errors. December 2018 Overstated $12,100 December 2019 Understated $ 6,800 December 2020 Overstated $ 8,000 2. In 2020, the company sold for $6,300 equipment that had a book value of $4,000 and originally cost $45,000. The company credited the proceeds from the sale to the Equipment account. The company made the following entry: Cash 6,300 Gain on Sale of Equipment 6,300 3. At December 31, 2020 Jordan, Inc. decided to change the depreciation method on its machinery from double-declining-balance to straight-line. The Machinery had an original cost of $100,000 when purchased on July 1, 2018. It has a 10-year useful life and no salvage value. Depreciation expense recorded prior to 2020 under the double-declining-balance method was $28,000. Jordan, Inc. has already recorded 2020 depreciation expense of $14,400 using the double-declining balance. 4. During November 2018, a competitor company filed a patent-infringement suit against Jordan, Inc. claiming damages of $150,000. In December 2018 the companys legal counsel has indicated that an unfavorable verdict is probable and a reasonable estimate of the courts award to the competitor is $85,000. The company made the following entry in 2019. Patent-infringement Expense 85,000 Lawsuit Liability 85,000 5. A $19,200 insurance premium paid for a six-month policy on October 1, 2020 for a policy that expires on March 31, 2021, was charged to insurance expense. 6. A trademark was acquired January 5, 2018 for $50,000. No amortization has been recorded since its acquisition. The maximum allowable amortization period is 10 years. 7. Jordan, Inc. has not accrued commissions payable at the end of each of the last 3 years, as follows. Commissions are expensed the following year when paid. December 2018 $12,000 December 2019 $10,200 December 2020 $14,500 8. Jordan, Inc. has not recorded any depreciation on their computer equipment for 2018-2020. It was acquired in at the beginning of January 2018 for $90,000, has a salvage value of $10,000 and useful life of 4 years. 9. Jordan, Inc. purchased $6,500 of supplies during 2020 recording a debit to Supplies Expense and credit to Cash. The supplies on hand at December 31, 2020 amounted to $600. No adjustment was recorded. 10. The 2020 December utilities bills have been expensed in January 2021, the following month, when paid. Utilities payable on December 31 of each year were as follows. 2018 $850 2019 480 2020 700 Reported Net Income is: 2018 $750,000 2019 $630,000 2020 $660,000 Instructions (a) Assume the trial balance has been prepared but the books HAVE NOT been closed for 2020. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations). (b) Assume the trial balance has been prepared but the books HAVE been closed for 2020. Assuming all amounts are material, prepare journal entries showing the adjustments that are required. (Ignore income tax considerations). (c) Complete the excel schedule correcting net income for 2018, 2019 and 2020 assuming the books HAVE NOT been closed for 2020.