Comprehensive Problem 3 Part 1: Selected transactions completed by Kornett Company during its first fiscal year ended December 31, 20Y5, were as follows: 1. Journalize the selected transactions. Assume 360 days per year. If no entry is required, select "No entry required" from the dropdown and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. Jan. 3: Issued a check to establish a petty cash fund of $4,500. Feb. 26: Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $1,680; miscellaneous selling expense, $570; miscellaneous administrative expense, $880. Apr. 14: Purchased $31,300 of merchandise on account, terms n/30. The perpetual inventory system is used to account for inventory. May 13: Paid the invoice of April 14. May 17: Received cash from daily cash sales for $21,200. The amount indicated by the cash register was $21,240. Date Description Debit Credit May 17 Accounts ReceivableCashNo Entry RequiredNotes ReceivableSales fill in the blank 32 fill in the blank 33 Accounts ReceivableCash Short and OverNo Entry RequiredSalesSales Discounts fill in the blank 35 fill in the blank 36 Accounts ReceivableCashCash Short and OverNo Entry RequiredSales fill in the blank 38 fill in the blank 39 June 2: Received a 60-day, 8% note for $180,000 on the Ryanair account. Date Description Debit Credit June 2 Accounts Receivable-RyanairCashInterest RevenueNo Entry RequiredNotes Receivable fill in the blank 41 fill in the blank 42 Accounts Receivable-RyanairCashInterest RevenueNo Entry RequiredNotes Receivable fill in the blank 44 fill in the blank 45 Aug. 1: Received amount owed on June 2 note, plus interest at the maturity date. Date Description Debit Credit Aug. 1 Accounts Receivable-RyanairCashInterest RevenueNo Entry RequiredNotes Receivable fill in the blank 47 fill in the blank 48 Accounts Receivable-RyanairCashInterest ReceivableNo Entry RequiredNotes Receivable fill in the blank 50 fill in the blank 51 Accounts Receivable-RyanairCashInterest RevenueNo Entry RequiredNotes Receivable fill in the blank 53 fill in the blank 54 Aug. 24: Received $7,600 on the Finley account and wrote off the remainder owed on a $9,000 accounts receivable balance. (The allowance method is used in accounting for uncollectible receivables.) Date Description Debit Credit Aug. 24 Accounts Receivable-FinleyBad Debt ExpenseCashNo Entry RequiredSales fill in the blank 56 fill in the blank 57 Accounts Receivable-FinleyAllowance for Doubtful AccountsBad Debt ExpenseNo Entry RequiredSales fill in the blank 59 fill in the blank 60 Accounts Receivable-FinleyAllowance for Doubtful AccountsCashNo Entry RequiredSales fill in the blank 62 fill in the blank 63 Sept. 15: Reinstated the Finley account written off on August 24 and received $1,400 cash in full payment. Date Description Debit Credit Sept. 15 Accounts Receivable-FinleyAllowance for Doubtful AccountsCash Short and OverNo Entry RequiredNotes Receivable fill in the blank 65 fill in the blank 66 Allowance for Doubtful AccountsCashNo Entry RequiredNotes ReceivableSales fill in the blank 68 fill in the blank 69 Allowance for Doubtful AccountsBad Debt ExpenseCashNo Entry RequiredNotes Receivable fill in the blank 71 fill in the blank 72 Accounts Receivable-FinleyBad Debt ExpenseCashNo Entry RequiredNotes Receivable fill in the blank 74 fill in the blank 75 Sept. 15: Purchased land by issuing a $670,000, 90-day note to Zahorik Co., which discounted it at 9%. Date Description Debit Credit Sept. 15 Accounts PayableCashLandNo Entry RequiredNotes Payable fill in the blank 77 fill in the blank 78 Accounts PayableCashInterest ExpenseNo Entry RequiredNotes Payable fill in the blank 80 fill in the blank 81 Accounts PayableInterest ExpenseLandNo Entry RequiredNotes Payable fill in the blank 83 fill in the blank 84 Oct. 17: Sold office equipment in exchange for $135,000 cash plus receipt of a $100,000, 90-day, 9% note. The equipment had a cost of $320,000 and accumulated depreciation of $64,000 as of October 17. Date Description Debit Credit Oct. 17 Accounts PayableCashNo Entry RequiredNotes PayableOffice Equipment fill in the blank 86 fill in the blank 87 Depreciation Expense-Office Equip.Gain on Sale of Office EquipmentNo Entry RequiredNotes ReceivableOffice Equipment fill in the blank 89 fill in the blank 90 Accumulated Depreciation-Office Equip.Depreciation Expense-Office Equip.Notes Payable No entry requiredOffice Equipment fill in the blank 92 fill in the blank 93 Depreciation Expense-Office Equip.Gain on Sale of Office EquipmentLoss on Sale of Office EquipmentNo Entry RequiredOffice Equipment fill in the blank 95 fill in the blank 96 Accumulated Depreciation-Office Equip.Gain on Sale of Office EquipmentNo Entry RequiredNotes ReceivableOffice Equipment fill in the blank 98 fill in the blank 99 Nov. 30: Journalize the monthly payroll for November, based on the following data: Salaries Line Item Description Amount Sales salaries $135,000 Office salaries 77,250 Total $212,250 Deductions Line Item Description Amount Income tax withheld $39,266 Social security tax withheld 12,735 Medicare tax withheld 3,184 Line Item Description Numerical Data Unemployment tax rates: State unemployment 5.4% Federal unemployment 0.8% Amount subject to unemployment taxes: State unemployment $5,000 Federal unemployment 5,000 Date Description Debit Credit Nov. 30 CashMedicare Tax PayableNo Entry Required Sales Salaries ExpenseSales Salaries Payable fill in the blank 101 fill in the blank 102 Cash No entry requiredOffice Salaries ExpenseOffice Salaries PayableSocial Security Tax Payable fill in the blank 104 fill in the blank 105 CashEmployees Income Tax ExpenseEmployees Income Tax PayableNo Entry Required Sales Salaries Expense fill in the blank 107 fill in the blank 108 Accounts Payable CashNo Entry RequiredSocial Security Tax ExpenseSocial Security Tax Payable fill in the blank 110 fill in the blank 111 Accounts PayableCashMedicare Tax ExpenseMedicare Tax Payable No entry required fill in the blank 113 fill in the blank 114 Accounts Payable CashNo Entry RequiredSalaries Payable Sales Salaries Expense fill in the blank 116 fill in the blank 117 Nov. 30: Journalize the employer's payroll taxes on the payroll. Date Description Debit Credit Nov. 30 Cash No entry requiredPayroll Taxes ExpensePayroll Taxes PayableSocial Security Tax Payable fill in the blank 119 fill in the blank 120 Cash No entry requiredPayroll Taxes PayableSocial Security Tax ExpenseSocial Security Tax Payable fill in the blank 122 fill in the blank 123 CashMedicare Tax ExpenseMedicare Tax Payable No entry requiredPayroll Taxes Payable fill in the blank 125 fill in the blank 126 Cash No entry requiredState Unemployment Tax ExpenseState Unemployment Tax PayablePayroll Taxes Expense fill in the blank 128 fill in the blank 129 CashFederal Unemployment Tax ExpenseFederal Unemployment Tax Payable No entry requiredPayroll Taxes Payable fill in the blank 131 fill in the blank 132 Dec. 14: Journalize the payment of the September 15 note at maturity. Dec. 31: The pension cost for the year was $190,400, of which $139,700 was paid to the pension plan trustee. Comprehensive Problem 3 Part 2: The following is a comprehensive problem which encompasses all of the elements learned in previous chapters. You can refer to the objectives for each chapter covered as a review of the concepts. Note: You must complete part 1 before completing part 2. Based on the following data, prepare a bank reconciliation for December of the current year: Balance according to the bank statement at December 31, $283,000. Balance according to the ledger at December 31, $245,410. Checks outstanding at December 31, $68,540. Deposit in transit, not recorded by bank, $29,500. Bank debit memo for service charges, $750. A check for $12,700 in payment of an invoice was incorrectly recorded in the accounts as $12,000. Kornett Company Bank Reconciliation December 31, 20Y5 Line Item Description Amount Amount Accounts PayableBalance according to bank statementBalance according to company's recordsCashPetty cash $fill in the blank 2 Add: Accounts PayableAdd: Bank service chargesAdd: CashAdd: Deposit in transit on December 31Add: Service charges fill in the blank 4 Add: Accounts PayableAdd: Error in recording checkAdd: Outstanding checksDeduct: Outstanding checksDeduct: Service charges fill in the blank 6 Adjusted balance $fill in the blank 7 Accounts PayableBalance according to company's recordsBalance according to bank statementDeposits in transitPetty cash $fill in the blank 9 Deduct: Accounts PayableDeduct: Bank service chargesDeduct: CashDeduct: Deposit in transit, not recorded by bankDeduct: Outstanding checks $fill in the blank 11 Deduct: Accounts PayableDeduct: Accounts receivableDeduct: Error in recording checkDeduct: Outstanding checksDeduct: Petty cash fill in the blank 13 Total deductions fill in the blank 14 Adjusted balance $fill in the blank 15