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The following list of accounts and their balances represents the unadjusted trial balance of Alt Company at December 31, 2010: Cash $ 30,890 Short-term Investment 60,000 Accounts Receivable 69,000 Allowance for Doubtful Accounts $ 500 Merchandise Inventory 54,720 Prepaid Rent 36,000 Plant and Equipment 160,000 Accumulated Depreciation 14,740 Accounts Payable 11,370 Bonds Payable 90,000 Common Stock 170,000 Retained Earnings 97,180 Sales 214,800 Cost of Goods Sold 154,400 Transportation-Out 11,000 Salaries and Wages Expense 32,000 Interest Expense 2,040 Rent Revenue 21,600 Miscellaneous Expense 890 Insurance Expense 9,250 $620,190 $620,190 Additional Data: 1. The balance in the Insurance Expense account contains the premium costs of three policies: Policy 1, remaining cost of $2,550, 1-yr. term, taken out on May 1, 2009; Policy 2, original cost of $5,400, 3-yr. term, taken out on Oct. 1, 2010; Policy 3, original cost of $1,300, 1-yr. term, taken out on Jan. 1, 2010. 2. On September 30, 2010, Alt received $21,600 rent from its lessee for an eighteen month lease beginning on that date. 3. The regular rate of depreciation is 10% per year. Acquisitions and retirements during a year are depreciated at half this rate. There were no purchases during the year. On December 31, 2009, the balance of the Plant and Equipment account was $260,000. 4. On December 28, 2010, the bookkeeper incorrectly credited Sales for a receipt on account in the amount of $10,000. 5. At December 31, 2010, salaries accrued but unpaid were $4,200. 6. Alt estimates that 2% of sales will become uncollectible. 7. On August 1, 2010, Alt purchased, as a short-term investment, 60 $1,000, 9% bonds of Allen Corp. at par. The bonds mature on August 1, 2011. Interest payment dates are July 31 and January 31. 8. On April 30, 2010, Alt rented a warehouse for $3,000 per month, paying $36,000 in advance. Instructions (a) Record the necessary correcting and adjusting entries. (b) Indicate which of the adjusting entries may be reversed at the beginning of the next accounting period

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