Prepare any necessary adjusting entries at December 31, 2013, for Melbourn Companys year- end financial statements for

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Prepare any necessary adjusting entries at December 31, 2013, for Melbourn Company’s year- end financial statements for each of the following separate transactions and events.
1. Melbourn Company guarantees the $ 100,000 debt of a supplier. The supplier will probably not default on the debt.
2. A disgruntled employee is suing Melbourn Company. Legal advisers believe that the company will probably need to pay damages, but the amount cannot be reasonably estimated.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Fundamental accounting principle

ISBN: 978-0078025587

21st edition

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

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