I.

AUDIT ADJUSTING ENTRIES

1. Advances to officers and employees 3,000

Marketing and administrative expense 4,500

Petty cash 7,500

2. A. Accounts receivable 35,000

Cash in bank 35,000

B. Cash in bank 40,000

Accounts receivable 40,000

E. Cash in bank 48,300

Accounts payable 48,300

3. Trading securities 20,000

Unrealized gain on trading securities 20,000

4. A. Advances to officers and employees 120,000

Accounts receivable 120,000

B. Sales 625,000

Inventories 500,000

Accounts receivable 625,000

Cost of goods sold 500,000

Marketing and administrative expense 17,900

 Allowance for uncollectible accounts 17,900

5. A. Inventories 26,000

Cost of goods sold 26,000

B. Accounts payable 35,000

Cost of goods sold 35,000

C. Inventories 27,000

Accounts payable 27,000

D. Cost of goods sold 22,350

Accounts payable 22,350

E. Sales 36,000

Inventories 25,000

Accounts receivable 36,000

Cost of goods sold 25,000

6. Marketing and administrative expense 6,250

Prepaid insurance 6,250

7.A. Land 1,864,000

Building 7,606,000

Other income 30,000

Land and building 8,600,000

 Marketing and administrative expense 900,000

B. Marketing and administrative expense 166,800

Accumulated depreciation - building 150,000

Accumulated depreciation – leasehold improvements 16,800

8. Marketing and administrative expense 50,000

Accumulated amortization – franchise 50,000

9. Marketing and administrative expense 72,000

Licensing agreement 144,000

Accumulated amortization – licensing agreement 216,000

10. A. Accounts payable – De la Cruz 126,000

Accounts payable – De Leon 126,000

B. Marketing and administrative expense 140,800

Accrued expense 140,800

11. Other income 130,000

Unearned revenue 130,000

12. Interest expense 200,000

 Interest payable 200,000

Mortgage payable 500,000

Current portion of long term debt 500,000

13. Interest expense 187,800

Interest payable 180,000

Discount on bonds payable 7,800

14. Income tax payable 127,126

Income tax expense 127,126