Enter the following column headings across the top of a sheet of paper:

Enter the transaction/adjustment letter in the first column and show the effect, if any, of each transaction/adjustment on the appropriate balance sheet category or on net in-come by entering for each category affected the account name and amount, and indicating whether it is an addition (+) or a subtraction (-). Items that affect net income should not also be shown as affecting stockholders' equity. You may also write the journal entries to record each transaction/adjustment.
a. Income tax expense of $1,400 for the current period is accrued. Of the accrual, $400 represents deferred tax liabilities.
b. Bonds payable with a face amount of $15,000 are issued at a price of 98.
c. Of the proceeds from the bonds in part b. $9,000 is used to purchase land for future expansion.
d. Because of warranty claims, finished goods inventory costing $128 is sent to customers to replace defective products.
e. A three-month, 9% note payable with a face amount of $60,000 was signed. The bank made the loan on a discount basis.
f. The next installment of a long-term serial bond requiring an annual principal repayment of $70,000 will become due within the current year.

Transcribed Image Text:

Transaction/ Current Noncurrent Current Noncurrent Stockholders Net Adjustment Assets Assets Liabilities Liabilities Equity Income