Reference no: EM13750298

Instructions 1. Journalize the selected transactions. 2. Based on the following data, prepare a bank reconciliation for December of the current year: a. Balance according to the bank statement at December 31, $283,000. b. Balance according to the ledger at December 31, $245,410. c. Checks outstanding at December 31, $65,840. d. Deposit in transit, not recorded by bank, $29,500. e. Bank debit memo for service charges, $750. f. A check for $12,700 in payment of an invoice was incorrectly recorded in the accounts as $12,000. 3. Based on the bank reconciliation prepared in (2), journalize the entry or entries to be made by Kornett Company. 4. Based on the following selected data, journalize the adjusting entries as of December 31 of the current year. a. Estimated uncollectible accounts at December 31, $16,000, based on an aging of accounts receivable. The balance of Allowance for Doubtful Accounts at December 31 was $2,000 (debit). b. The physical inventory on December 31 indicated inventory shrinkage of $3,300. c. Prepaid insurance expired during the year, $22820. d. Office Supplest used during the year, $3,920. e. Depreciation is computed as follows: Asset Cost Residual Value Acquisition Date Useful Life in Years Depreciation Method Used Buildings 900,000 0 January 2 50 Double-Declining Balance Office Equip. 246,000 26,000 January 3 5 Straight-Line Store Equip. 112,000 12,000 July 1 10 Straight-Line f. A patent costing $48,000 when acquired on January 2 has a remaining legal life of 10 years and is expected to have value for 8 years. g. The cost of mineral rights was $546,000. Of the estimated deposit of 910,000 tons of ore, 50,000 tons were mined and sold during the year. h. Vacation pay expense for December, $10,500. i. A product warranty was granted beginning December 1 and covering a one-year period. The estimated cost is 4% of sales, which totaled $1,900,000 in December. j. Interest was accrued on the note receivable on October 17. 5. Based on the following information and the post-closing trial balance shown below, prepare a balance sheet in report form at December 31 of the current year. The merchandise inventory is stated at cost by the LIFO method. The product warranty payable is a current liability. Vacation pay payable: Current Liability $7,140 Long-term liability 3,360 The unfunded pension liability is a long-term liability. Notes Payable: Current Liability $70,000 Long-term liability 630,000