Mackenzie Corp, is preparing the December 31, 2020, year-end financial statements. Following are selected unadjusted account balances: Estimated warranty liability Income tax expense Mortgage payable, 6% $ 6,470 120-day note payable, 5% Unearned revenues Warranty expense 119,900 445,000 $ 81,000 297,000 6,500 Additional information: a. $10,900 of income tax was accrued monthly from January through to November inclusive and paid on the 15th day of the following month. The actual amount of tax expense for the year is determined to be $127,040. b. A customer is suing the company. Legal advisers believe it is probable that the company will have to pay damages, the amount of which will approximate $141,000 given similar cases in the industry. c. During December, Mackenzie had sales of $711,000. 4% of sales typically require warranty work equal to 25% of the sales amount. d. Mortgage payments are made on the first day of each month. e. $111,600 of the Unearned Revenues remain unearned at December 31, 2020. f. The 120-day note payable was dated November 15, 2020. Required: 1. Prepare any required adjusting entries at December 31, 2020, for each of the above. (Use 365 days a year. Do not round intermediate calculations and round the final answers to 2 decimal places.)
Mackenzie Corp, is preparing the December 31, 2020, year-end financial statements. Following are selected unadjusted account balances: Estimated warranty liability Income tax expense Mortgage payable, 6% $ 6,470 120-day note payable, 5% Unearned revenues Warranty expense 119,900 445,000 $ 81,000 297,000 6,500 Additional information: a. $10,900 of income tax was accrued monthly from January through to November inclusive and paid on the 15th day of the following month. The actual amount of tax expense for the year is determined to be $127,040. b. A customer is suing the company. Legal advisers believe it is probable that the company will have to pay damages, the amount of which will approximate $141,000 given similar cases in the industry. c. During December, Mackenzie had sales of $711,000. 4% of sales typically require warranty work equal to 25% of the sales amount. d. Mortgage payments are made on the first day of each month. e. $111,600 of the Unearned Revenues remain unearned at December 31, 2020. f. The 120-day note payable was dated November 15, 2020. Required: 1. Prepare any required adjusting entries at December 31, 2020, for each of the above. (Use 365 days a year. Do not round intermediate calculations and round the final answers to 2 decimal places.)
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 50P
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Transcribed Image Text:Mackenzie Corp, is preparing the December 31, 2020, year-end financial statements. Following are selected unadjusted account
balances:
Estimated warranty liability
Income tax expense
Mortgage payable, 6%
$ 6,470 120-day note payable, 5%
Unearned revenues
Warranty expense
119,900
445,000
$ 81,000
297,000
6,500
Additional information:
a. $10,900 of income tax was accrued monthly from January through to November inclusive and paid on the 15th day of the following
month. The actual amount of tax expense for the year is determined to be $127,040.
b. A customer is suing the company. Legal advisers believe it is probable that the company will have to pay damages, the amount of
which will approximate $141,000 given similar cases in the industry.
c. During December, Mackenzie had sales of $711,000. 4% of sales typically require warranty work equal to 25% of the sales amount.
d. Mortgage payments are made on the first day of each month.
e. $111,600 of the Unearned Revenues remain unearned at December 31, 2020.
f. The 120-day note payable was dated November 15, 2020.
Required:
1. Prepare any required adjusting entries at December 31, 2020, for each of the above. (Use 365 days a year. Do not round
intermediate calculations and round the final answers to 2 decimal places.)
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