1/3100%AApp1-4 Adjusting Entries:Manitoba Mini Homes Corp. has annual carnings of $24,600 in its unadjusted trial balance. The company preparesfinancial statements annually, with adjusting journal entries recorded at year-end. The following items have not yet beenaddressed for the fiscal period ended 31 December:Page 790a. A 12-month, $1,560 insurance policy that commenced on 1 September was paid on 1 September and debited to prepaid insuranceat that time. The prepaid insurance account already had a balance of $960 on I September in relation to the prior insurancecoverage, which expired on 30 August.b. The office supplies inventory account had a balance of $1,300 at the beginning of the year. Supplies costing $3,900 were purchasedduring the year and expensed as bought. There is an inventory of S1,700 physically on hand at the end of the year.c. Manitoba completed a mini-home sale on the last day of the fiscal year but has not yet recorded the transaction. The mini-homewas sold for $56,000, and the proceeds were to be paid in early January. The unit has a cost of $43,100 and was still in inventory onthe books as of 31 December.d. A service charge of $135, a deduction from the cash account per the bank statement for December, has not yet been recorded.Interest on outstanding loans for $560 was also taken out of the bank account in December but is not recorded.e. A customer paid a $10,000 deposit for repairs in December. This amount was credited to revenue, but the work is not expected tobe done until January.f. A customer paid $5,160 in early November for one year's rent on a mini home, a rental arrangement effective on I November. Thecash received was credited to revenue in November.g. A customer paid $6,000 in early August for one year's rent on a mini-home, a rental arrangement commencing on 1 August. Thecash received was credited to unearned revenue in August.h. A customer who rents a mini-home did not pay her rent in Novenmber or December, although the company believes that theamount will be paid in January. Nothing has been recorded for November or December. Monthly rental is $500 on this unit.Required:1. Journalize each of the above transactions in general journal form, as needed.2. Calculate the revised earnings for the period, reflecting tlhe adjustments in requirenment I.1NO99+近 2/3100%A1-10 Impact of Differing Objectives:Privately owned BlueScreen Corporation is primarily a retailer of computer equipment for individuals and small business. Theeffective cost of computer equipment and peripherals, at both the retail and manufacturing levels, has been declining rapidly for manyyears and shows every sign of continuing that decline.The company also develops software intended for small business applications-that is, for companies with up to 500 employees. Thesoftware is sold in BlueScreen's own stores as well as through the company website. However, most sales come through generalsoftware distributors (e.g., Download.com).For sales through the distributors, purchasers can obtain a 30-day limited-feature trial by paying an initial fee equal to 10% of the retailprice of the software. If the customer decides to buy after 30 days, the trial fee is credited to the total cost of the purchase.On average, about two-thirds of the trials result in final purchase. Software development is a continuous process, includingupdates of existing software.Page 34Some of BlueScreen's accounting issues are as follows:1. What inventory methods should be used foretail merchandise in its stores and warehouses.2. How the software development cost should be accounted for.3. How the company should account for tangible capital assets, such as the warchouse building (which it owns), stores (which areleased), and store fixtures.4. All of the company's personnel-retail, managerial, and software development-are sent annually to proféssional developmentprograms to keep their skills at the cutting edge of performance. The company spends many millions of dollars on these programsevery year.5. The company opens an average of 20 new stores every year. About five stores are closed every year.Required:Using the chart below, indicate the accounting policies the company should choose for each of these issues under each of threedifferent primary financial reporting objectives:1. Earnings maximization2. Cash flow prediction3. Earnings minimizationIssueEarnings MaximizationCash Flow PredictionEarnings Minimization2.3.99+

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AApp1-4 Adjusting Entries: Manitoba Mini Homes Corp. has annual carnings of $24,600 in its unadjusted trial balance. The company prepares financial statements annually, with adjusting journal entries recorded at year-end. The following items have not yet been addressed for the fiscal period ended 31 December: Page 790 a. A 12-month, $1,560 insurance policy that commenced on 1 September was paid on 1 September and debited to prepaid insurance at that time. The prepaid insurance account already had a balance of $960 on I September in relation to the prior insurance coverage, which expired on 30 August. b. The office supplies inventory account had a balance of $1.300 at the beginning of the year. Supplies costing $3,900 were purchased during the year and expensed as bought. There is an inventory of $1,700 pliysically on hand at the end of the year. c. Manitoba completed a mini-home sale on the last day of the fiscal year but has not yet recorded the transaction. The mini-home was sold for $56,000, and the proceeds were to be paid in early January. The unit has a cost of $43,1I00 and was still in inventory on the books as of 31 December. d. A service charge of $135, a deduction from the cash account per the bank statement for December, has not yet been recorded. Interest on outstanding loans for $560 was also taken out of the bank account in December but is not recorded. e. A customer paid a $10,000 deposit for repairs in December. This amount was credited to revenue, but the work is not expected to be done until January. f. A customer paid $5,160 in early November for one year's rent on a mini-home, a rental arrangement effective on I November. The cash received was credited to revenue in November. g. A customer paid $6,000 in early August for one year's rent on a mini-home. a rental arrangement commencing on I August. The cash received was credited to unearned revenue in August. h. A customer who rents a mini-home did not pay her rent in November or December, although the company believes that the amount will be paid in January. Nothing has been recorded for November or December. Monthly rental is $500 on this unit. Required: 1. Journalize each of the above transactions in general journal form, as needed. 2. Calculate the revised earnings for the period, reflecting the adjustments in requirement I.