Part 1: Adjusting entries 2012 adjusted trial balance and corrected 12/31/11 bal

Part 1: Adjusting entries 2012 adjusted trial balance and corrected 12/31/11 balance sheet.Due: Tuesday 7/9/13 at the beginning of class. Part 2: Using the solution to part 1 which will be made available after part 1 is turned in on blackboard you are to prepare the income statement statement of stockholders equity statement of cash flows balance sheet; all in proper form You have the option of preparing a statement of comprehensive income or to incorporate that into the statement of stockholders equity.Both parts must be typed in 10 or 12 font.NOTE: Important! Make a copy of your solution. The solution to the problem will be posted on blackboard after you turn in the project.Purpose of this assignment:These are foundational to this course and your career as accountants.Setting:You have been hired by Dillard to prepare adjusting entries and financial statements for 2012. Previously Rinky Dink Accounting had been performing such tasks. Ignore tax effects.The trial balance at 12/31/12 before you work your magic and the balance sheet at 12/31/11 are included in a separate excel file.CompanyInitial Investment CostMarket Value at 12/31/11Market Value at 12/31/12DAG$300$330$320GLS505540HRG1007895You also discuss with the CFO the Investment in Timberside Corporation. You discover that this Investment was first made 3 years ago on 1/1/10 and that the investment cost was $700000 . The investment in 30% of the voting stock of Timberside was made in order to be able to have representation on its board since Timberside is a key supplier of the inventory that Dillard sells. Dillard wants to have a say in the quality control and other decisions that Timberside makes. You dig around and realize that the $700000 investment cost was exactly equal to 30% of the book value of equity of Timberside on 1/1/10. You also determine that Dillard has been recording dividend revenue when it receives payment. During 2010 Dillard received $10000 in dividends in 2011 $25000 and are $25000 in 2012. Timberside has reported income during 2010 2011 and 2012 of $300000 $350000 and $330000 respectively.On 1/1/08 Dillard purchased 300 $1000 face 8% Mickey Mouse Corporation bonds interest paid semi-annually on 7/1 and 12/31 with a maturity term of 10 years. The purchase price was $280488.YearWarranty costs paid2009$70002010$100002011$120002012$11000After exploring the timing of sales during the year and what seems like the company will pay given experience you compute the following warranty liabilities at each year end.Original Sale yearEstimated liability on 12/31/09Estimated liability on 12/31/10Estimated liability on 12/31/11Estimated liability at 12/31/122009$4000$10000020109000$1000020117000$200020124000Total$4000$10000$8000$6000