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How do I record these adjusting journal entries:

How do I record these adjusting journal entries:Adjusting Journal Entries (AJE’s):1.

Wages earned by employees during December (’15) and to be paid in January (’16) are $35,875; associated payroll taxes on these wages are $2,910. (Record in two separate adjusting entries. The payroll taxes are an expense to the company for unemployment benefits and recorded as a payable to the state & federal taxing authority.)

2. The Unearned Consulting Revenue account has a balance of $261,220 as of December 31, 2015. On May 1, 2015 a client paid CMC $153,000 cash in advance for a 12-month consulting services contract. CMC will earn revenue evenly over this 12-month period. This was the only prepayment received from clients during the entire 2015 fiscal year and recorded with a credit to Unearned Revenue. Of the beginning balance in Unearned Revenue (i.e. at Jan 1 2015), 65% of the work has now been completed by year end.

3. You discover that a sale of a product was made on account and recorded in December for $148,500; the product has not yet been shipped (i.e. delivered to the customer). The cost of the product was 55% of its selling price. CMC uses the perpetual inventory method.

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4. Bad debt expense is estimated to be 6% of ending Accounts Receivable. (Round to the nearest whole dollar.)

5. CMC prepays for some insurance and advertising. The Prepaid Expense account has a balance of $26,774 at year end but before adjustment. This balance includes $12,200 for a two-year casualty insurance policy purchased on March 1, 2015. Of the remaining prepaid balance, 60% of the advertising has now been used. (Round to the nearest whole dollar.)

6. Annual depreciation rates are 7% for Buildings & Equipment/Furniture. No salvage. (Round to the nearest whole dollar.)

7. The long-term liabilities were outstanding for all of 2015 and accrue interest at 8% APR. CMCrecords accrued interest quarterly (interest was last updated on Sept. 30.) The company is required to pay the interest annually each January 1st.

8. CMC often allows customers to finance the purchase of their products through long-term lending agreements and therefore reports Long-term Notes Receivable on their Balance Sheet. These notes are interest bearing and earn CMC interest revenue. The beginning balance of Interest Receivable at January 1, 2015 was $3,500. During 2015, cash received from customers for interest on these notes amounted to $17,600. You determine that the income statement for the year-ended December 31, 2015 should show Interest Revenue in the amount of $18,700. The adjusting entry to accrue interest revenue has not yet been recorded.

9. On December 15, CMCdeclareda dividend of $150,000, to be paid on January 20, 2016. It had not yet been recorded.

10. At December 31, the Long-Term Investments (Available-for-sale securities or “AFS”) had a fair value of $165,700. The AFS Investment was originally purchased on May 1, 2015 for $180,186. CMCuses a “Fair Value Adjustment” account (an adjunct/contra account to the Investments) to mark-to-market the investment portfolio at year end. CMC’s tax rate is 35%.

Unadjusted Trial Balance:

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General Ledger Account Name How do I record these adjusting journal entries:
Adjusting Journal Entries (AJE’s):
1.
Wages earned by employees during December (’15) and to be paid in January (’16) are $35,875; associated payroll taxes on these wages are $2,910. (Record in two separate adjusting entries. The payroll taxes are an expense to the company for unemployment benefits and recorded as a payable to the state & federal taxing authority.)
2. The Unearned Consulting Revenue account has a balance of $261,220 as of December 31, 2015. On May 1, 2015 a client paid CMC $153,000 cash in advance for a 12-month consulting services contract. CMC will earn revenue evenly over this 12-month period. This was the only prepayment received from clients during the entire 2015 fiscal year and recorded with a credit to Unearned Revenue. Of the beginning balance in Unearned Revenue (i.e. at Jan 1 2015), 65% of the work has now been completed by year end.
3. You discover that a sale of a product was made on account and recorded in December for $148,500; the product has not yet been shipped (i.e. delivered to the customer). The cost of the product was 55% of its selling price. CMC uses the perpetual inventory method.
4. Bad debt expense is estimated to be 6% of ending Accounts Receivable. (Round to the nearest whole dollar.)
5. CMC prepays for some insurance and advertising. The Prepaid Expense account has a balance of $26,774 at year end but before adjustment. This balance includes $12,200 for a two-year casualty insurance policy purchased on March 1, 2015. Of the remaining prepaid balance, 60% of the advertising has now been used. (Round to the nearest whole dollar.)
6. Annual depreciation rates are 7% for Buildings & Equipment/Furniture. No salvage. (Round to the nearest whole dollar.)
7. The long-term liabilities were outstanding for all of 2015 and accrue interest at 8% APR. CMCrecords accrued interest quarterly
(interest was last updated on Sept. 30.) The company is required to pay the interest annually each January 1st.
8. CMC often allows customers to finance the purchase of their products through long-term lending agreements and therefore reports Long-term Notes Receivable on their Balance Sheet. These notes are interest bearing and earn CMC interest revenue. The beginning balance of Interest Receivable at January 1, 2015 was $3,500. During 2015, cash received from customers for interest on these notes amounted to $17,600. You determine that the income statement for the year-ended December 31, 2015 should show Interest Revenue in the amount of $18,700. The adjusting entry to accrue interest revenue has not yet been recorded.
9. On December 15, CMCdeclareda dividend of $150,000, to be paid on January 20, 2016. It had not yet been recorded.
10. At December 31, the Long-Term Investments (Available-for-sale securities or “AFS”) had a fair value of $165,700. The AFS Investment was originally purchased on May 1, 2015 for $180,186. CMCuses a “Fair Value Adjustment” account (an adjunct/contra account to the Investments) to mark-to-market the investment portfolio at year end. CMC’s tax rate is 35%.
Unadjusted Trial Balance:

General Ledger Account Name

Unadj. Balance 12/31/15




Cash and cash equivalents
72,377

Accounts Receivable
910,680

Allowance for doubtful accounts

29,462
Interest Receivable
0

Inventory
1,270,160

Prepaid expenses
26,774

Other Current Assets
16,063

Investments
180,186

Fair Value Adjustment
0
0
Notes Receivable
220,000

Building
876,418

Equipment and furniture
332,983

Land
348,791

Accum Depr

656,465
Goodwill
493,951

Other intangible assets
213,900

Accounts Payable

1,169,343
Dividends payable


Interest payable

41,310
Unearned Consulting Revenue

261,220
Wages payable

81,350
Payroll taxes payable

8,850
Income tax payable


Long term liabilities

688,500
Common Stock

920,000
Paid-in capital common stock

105,000
Treasury Stock
400,000

Retained Earnings

539,069
Dividends


Accum Other Comprehensive Income
0
0
Sales revenue

9,253,346
Service revenue

1,158,785
Interest Revenue

14,100
Sales returns
162,400

Sales discounts
269,662

Product cost of goods sold
5,384,590

Service cost of goods sold
570,811

Advertising
159,080

Bad debt expense
0

Depreciation and amortization
0

Professional Dues & subscriptions
21,470

Gain/loss on disposal
4,790

Income tax expense
0

Insurance
80,144

Interest expense
41,310

Legal and accounting fees
106,650

Miscellaneous
9,048

Office expense
220,114

Payroll taxes
136,975

Property taxes
104,570

Repair and maintenance
42,028

Research and development
470,680

Telephone
20,085

Travel and entertainment
38,391

Utilities
47,049

Wages
964,670

Salaries – Officers
710,000

Income Summary
0 General Ledger Account Name
Unadj. Balance 12/31/15
Cash and cash equivalents72,377
Accounts Receivable910,680
Allowance for doubtful accounts29,462
Interest Receivable0
Inventory1,270,160
Prepaid expenses26,774
Other Current Assets16,063
Investments180,186
Fair Value Adjustment00
Notes Receivable220,000
Building876,418
Equipment and furniture332,983
Land348,791
Accum Depr656,465
Goodwill493,951
Other intangible assets213,900
Accounts Payable1,169,343
Dividends payable
Interest payable41,310
Unearned Consulting Revenue261,220
Wages payable81,350
Payroll taxes payable8,850
Income tax payable
Long term liabilities688,500
Common Stock920,000
Paid-in capital common stock105,000
Treasury Stock400,000
Retained Earnings539,069
Dividends
Accum Other Comprehensive Income00
Sales revenue9,253,346
Service revenue1,158,785
Interest Revenue14,100
Sales returns162,400
Sales discounts269,662
Product cost of goods sold5,384,590
Service cost of goods sold570,811
Advertising159,080
Bad debt expense0
Depreciation and amortization0
Professional Dues & subscriptions21,470
Gain/loss on disposal4,790
Income tax expense0
Insurance80,144
Interest expense41,310
Legal and accounting fees106,650
Miscellaneous9,048
Office expense220,114
Payroll taxes136,975
Property taxes104,570
Repair and maintenance42,028
Research and development470,680
Telephone20,085
Travel and entertainment38,391
Utilities47,049
Wages964,670
Salaries – Officers710,000
Income Summary0
 
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