Question

please work this out for me. it is due on sunday please. thanks

Before you begin, print out all the pages in this workbook. The unadjusted trial balance of Morgan Manufacturing Corp. at December 31, 2019 is shown on the "Trial Bal" page (see tab below). Refer also to the additional year-end information for the company shown on the "Adjusting Entries" page (see tab below). Required: 1 Prepare year-end adjusting entries. General ledger account numbers are not necessary. Show your calculations below each adjusting entry. 2 Post the adjusting entries to the trial balance and prepare an adjusted trial balance. 3 Using the amounts from the adjusted trial balance, complete the financial statements for the year ended December 31, 2019. Morgan Manufacturing Corp. Adjusting Entries For the Year Ended December 31, 2019 The following additional information is available at the corporation's year-end. GST of 5% only applies when indicated. a. A sale on account has not been recorded in the amount of: $5,000 Applicable sales tax is: 8% b. Warranty expense for the year as a percentage of sales should be: 2% Unpaid gross salaries at year-end amount to: $10,000 C. Deductions from unpaid salaries are as follows: Employee Company Portion Portion Employee income taxes FICA Social Security taxes 12% 0% 4% 4% FICA Medicare taxes 29% 2% Company health insurance 4% 4% these are not the actual required percentages d. The estimated year-end audit fees are: $90,000 e. Rent revenue consists of 13 equal monthly payments, including one paid in advance for January 2020. f. A trade account payable was converted to a note payable during the year. No entry has been made to record this. The note payable is due at the end of 2020. The amount of the note payable is: $40,000 3% The annual interest rate on the note payable is: The note payable created at the end of this month: was (January 1; December 12) g. A lawsuit was commenced against the company in 2019. Damages claimed are: $30,000 Lawyers for the company consider the likelihood of success to be: Possible h. The interest rate on the mortgage is: 8% Annual payments (blended principal and interest) are made on Dec. $163,200 31 and total: The 2019 payment has been recorded as Interest on Long-term Debt expense. The corporate income tax rate as a percentage of income before i. 10% income taxes is: Corporate income tax installments during the year have been recorded as Income Tax expense in the records. Assume any 2019 loss before income taxes will result in the refund of income taxes at the current year's income tax rate. Morgan Manufacturing Corp. GENERAL JOURNAL Dec Credit 2019 Adjusting entries Debit Trial Balance At December 31, 2019 Adjustments Credit Unadjusted TB Account Adjusted TB Debit Adj. Debit Credit Adj. # Debit Credit Cash in bank Accounts receivable Parts inventory Corp, income tax receivable Land Building Accumulated dep'n - bldg. Trade accounts payable Interest payable Estimated current liabilities 74,000 760.000 210,000 10,000,000 7,900,000 1,580,000 140,000 Estimated warranty liability Salaries payable Employee inc. taxes pay. FICA Soc. Sec. pay. 136,000 FICA Medicare payable Co. health insurance payable Corp. income tax payable Sales tax payable Note payable Unearned rent revenue 1,000 1,632,000 Mortgage payable Common stock, $1 per sh. Retained earnings 9,000,000 2,963,800 Rent revenue 520,000 Sales, net Cost of goods sold Bad debts expense Co. health ins. expense 13,600,000 870,400 3,000 18,400 300,000 1,000 18,400 9,200 Delivery expense Dep'n. expense- building FICA Soc. Sec. exp. FICA Medicare exp. Interest and bank charges Interest on long-term debt Lawsuit damages expense Office supplies expense Professional fees Salaries expense Warranty expense Corp. income tax exp. 50,000 163,200 99,000 40,000 460,000 1,000 489,600 29,436,800 29,436,800 Morgan Manufacturing Corp. Income Statement For the Year Ended December 31, 2019 sales, net ess: Cost of goods sold Gross profit Operating expenses 2019 2018 $12.756.800 9,017,344 3,739,456 Selling Salaries and benefits Delivery Office supplies Warranty 532.510 282,510 99,000 Total selling General and administrative 247,520 1,161,030 Bad debts 2,790 Depreciation Lawsuit damages Professional fees 940 143.000 Total general and adminstrative 146,730 Total operating expenses Income from operations 1,307,760 2,431,696 Other income 499,200 Rent revenue Income before interest and income taxes 2,930,896 177,243 Interest expense Income before income taxes 2,753,653 275,365 Income taxes $2,478,288 Net income Morgan Manufacturing Corp. Statement of Changes in Equity For the Year Ended December 31, 2019 2018 2019 Retained Common Total equity Total equity earnings $2,963,800 stock $9,000,000 $11,963,800 $9,485,512 Balance at Jan. 1 2,478,288 $11,963,800 Net income $9,000,000 Balance at Dec. 31 Morgan Manufacturing Corp. Balance Sheet. At December 31, 2019 Assets Current Cash Accounts receivable, net 2019 2018 $41,970 Corporate income taxes receivable Inventories 640,000 168.012 849,982 Non-current Land 23,166,245 6,321,000 29,487,245 $30,337,227 Building, net Liabilities Current Trade accounts payable $108,150 84,600 Estimated current liabilities 126,900 Estimated warranty liabilities Note payable Interest payable 297 10,340 Salaries and benefits payable 1,540 Sales tax payable 41,600 Unearned rent Current portion of mortgage payable Corporate income taxes payable 180,000 553,427 Non-current 18,000,000 (180,000) Mortgage payable Less: Current portion 17,820,000 18,373,427 Total liabilities Stockholders' Equity 9,000,000 Common stock 2,963,800 Retained earnings 11,963,800 $30,337,227 Total liabilities and S/H equity

Answer 1

Requirement 1 (in $) (in $ Adjusting Journal entries Particulars Debit Credit Date Accounts Receivable Sales 5,400 a 5,000 Sales Tax Payable (5000*8%) 400 (To record sales made on account) Warranty Expense [(13600000+5000)*2%-1000] Estimated Warranty Liability (To record warrant expense) b 2,71,100 2,71,100 Salaries expense 10,000 C FICA Soc.sec.exp (10000*4%) 400 FICA medicare exp. (10000*2%) Co Health ins exp. (10000*4%) Employee Inc.Taxes pay (10000*12%) FICA Soc.sec.pay. (10000*4%)*2 |FICA Medicare payable (10000*2%)*2 |Co.Health Insurance payable (10000*4%)*2 Salaries Payable (bal.fig) 200 400 1,200 800 400 800 7,800 (To record supplies expense) Professional Fees Professional Fees payable (To record audit fees due) d 90,000 90,000 Rent Revenue Unearned Rent revenue (520000/13) (Jan month rent received in advance) 40,000 e 40,000

Trade Accounts Payable Note Payable f 40,000 40,000 (Trade payable converted into Notes payable) Interest and bank charges (40000*3%*9/12) Interest payable 006 900 (Accrued interest for 3 months) Lawsuit damage expense 30,000 Estimated current liabilities 30,000 (Possible estimated lawsuit damages) Mortgage Payable [163200-(1632000*8%)] Interest on Long-term debt (Correct treatment of interest on long term debt) h 32,640 32,640 j Corp.Inc Tax Rec. [489600-(3847440*10%)] 1,04,856 Corp.inc.tax expenses (Income tax adjustment) 1,04,856

Trial Balance as at December 31, 2019 (in $) Unadjusted TB Debit Adjusted TB Accounts Adjustments Credit Credit Debit Debit Credit Cash Bank 74,000 74,000 Accounts Receivable 7,60,000 5,400 7,65,400 2,10,000 Parts Inventory 2,10,000 Corp.income Tax Receivable 1,04,856 1,04,856 1,00,00,000 Land 1,00,00,000 Building Accumulated Depreciation-Building 79,00,000 79,00,000 15,80,000 15,80,000 Trade Accounts Payable Interest Payable 1,40,000 40,000 1,00,000 900 900 Professional Fees payable 90,000 90,000 Estimated Current Liabilities 30,000 30,000 Estimated Warranty Liability Salaries Payable 1,36,000 2,71,100 1,35,100 7,800 7,800 Employees inc.taxes pay. 1,200 1,200 FICA soc.sec.pay 800 800 FICA medicare payable Co.Health Insurance payable 400 400 800 800 Corp.income tax payable Sales tax payable Notes payable 1,000 400 1,400 40,000 40,000 Unearned Rent revenue 40,000 40,000 Mortgage Payable Common stock, $1 per sh. 16,32,000 32,640 15,99,360 90,00,000 90,00,000 Retained earnings 29,63,800 29,63,800 Rent revenue 5,20,000 4,80,000 40,000 5,000 Sales, net 1,36,00,000 1,36,05,000

Sales, net 1,36,00,000 5,000 1,36,05,000 Cost of goods sold Bad debts expense Co.Health ins.expense Delivery expense Dep.expense-Building 87,04,000 87,04,000 3.000 3,000 400 18,400 18,800 3,00,000 3,00,000 1,000 1,000 FICA Soc.sec.exp FICA medicare exp. 18,400 400 18,800 9,200 20C 9,400 Interest and Bank Charges Interest on long term debt Lawsuit damages expense Office Supplies expense 50,000 900 50,900 1.63.200 32.640 1,30,560 30.000 30,000 99,000 99,000 Professional fees Salaries expense Warranty expense 40,000 90,000 1,30,000 4,60,000 10,000 4,70,000 1,000 2,71,100 2,72,100 Corp.income tax exp. 4,89,600 1,04,856 3,84,744 Total 6,25,896 2,94,36,800 2,94,36,800 6,25,896 2,96,76,560 2,96,76,560

Morgan Manufacturing Corp Income Statement For the year ended December 31, 2019 Particulars 2019 2018 Sales, net 1,36,05,000 1,27,56,800 (-) Cost of goods sold 87,04,000 90,17,334 Gross Profit 49,01,000 37,39,466 () Operating expenses Selling Salaries and benefits 5,32,510 5,17,000 Delivery 3,00,000 2,82,000 Office Supplies 99,000 99,000 Warranty 2,72,100 2,47,520 Total Selling 11,88,100 11,61,030 General and administrative Bad Debts 3,000 2,790 Depreciation 1,000 940 Law Suit Damages 30,000 Professional Fees 1,30,000 1,43,000 Total General and administrative 1,64,000 1,46,730 Total Operating expenses 13,52,100 13,07,760 Income from Operations 35,48,900 24,31,696 Other Income Rent Revenue 4,80,000 4,99,200 Income before Interest and Income taxes 40,28,900 29,30,896 Interest expenses 1,81,460 1,77,243 Income before Income taxes 38,47,440 27,53,653 3,84,744 Income taxes 2,75,365 Net Income 34,62,696 24,78,288

Morgan Manufacturing Corp. Statement of Changes in Equity For the year ended December 31, 2019 2019 2018 Retained Total Equity Total Equity Common Stock Earnings 29,63,800 Balance at January 1 90,00,000 1,19,63,800 9485512 (+) Net Income 34,62,696 34,62,696 24,78,288 Balance at December 31 90,00,000 64,26,496 1,54,26,496 1,19,63,800

Morgan Manufacturing Corp Balance Sheet as on Dec 31, 2019 Particulars 2019 2018 Assets Current Cash 74,000 41,970 Accounts Receivable, net 7,65,400 6,40,000 Corporate Income Taxes receivable 1,04,856 Inventories 2,10,000 11,54,256 1,68,012 8,49,982 Non-Current Land 1,00,00,000 2,31,66,245 Building, net 63,20,000 63,21,000 Total Long-Term Assets 1,63,20,000 2,94,87,245 1,74,74,256 3,03,37,227

Liabilities Current Trade Accounts Payable 1,00,000 1,08,150 Estimated Current Liabilities 30,000 84,600 Estimated Warranty liabilities 1,35,100 1,26,900 Professional Fees Payable 90,000 Note Payable 40,000 Interest Payable Salaries and benefit payable Sales Tax Payable 297 900 10,340 11,000 1,400 1,540 Unearned Rent 40,000 41,600 Current portion of Martgage payable 15,994 1,80,000 Corporate income taxes payable 5,53,427 4,64,394 Non-Current Mortgage Payable 15,99,360 1,80,00,000 Less: Current portions -15,994 -1,80,000 15,83,366 1,78,20,000 1,83,73,427 Total Liabilities 20,47,760 Shareholder's Equity 90,00,000 Common Stock 90,00,000 Retained Earnings 64,26,496 29,63,800 1,19,63,800 1,54,26,496 Total Liabilities and S/H Equity 1,74,74,256 3,03,37,227