Gomez Co. had the following transactions in the last two months of its year ended December 31. Entries can draw from the following partial chart of accounts: Cash; Prepaid Insurance; Prepaid Advertising; Prepaid Consulting Fees; Unearned Service Fees; Service Fees Earned; Insurance Expense; Advertising Expense; and Consulting Fees Expense. Nov. 1 Paid $1,800 cash for future advertising. 1 Paid $2,460 cash for 12 months of insurance through October 31 of the next year. 30 Received $3,600 cash for future services to be provided to a customer. Dec. 1 Paid $3,000 cash for a consultant’s services to be received over the next three months. 15 Received $7,950 cash for future services to be provided to a customer. 31 Of the advertising paid for on November 1, $1,200 worth is not yet used. 31 A portion of the insurance paid for on November 1 has expired. No adjustment was made in November to Prepaid Insurance. 31 Services worth $1,500 are not yet provided to the customer who paid on November 30. 31 One-third of the consulting services paid for on December 1 have been received. 31 The company has performed $3,300 of services that the customer paid for on December 15. Required 1. Prepare entries for these transactions under the method that initially records prepaid expenses as assets and records unearned revenues as liabilities. Also prepare adjusting entries at the end of the year. 2. Prepare entries for these transactions under the method that initially records prepaid expenses as expenses and records unearned revenues as revenues. Also prepare adjusting entries at the end of the year. Analysis Component 3. Explain why the alternative sets of entries in requirements 1 and 2 do not result in different financial statement amounts

Blue computers, a major pc manufacturer in the united states, currently has plants in kentucky and pennsylvania. the kentucky plant has a capacity of 1 million units a year and the pennsylvania plant has a capacity of 1.5 million units a year. the firm divides the united states into five markets: northeast, southeast, midwest, south, and west. each pc sells for $1,000. the firm anticipates a 50 perc~nt growth in demand (in each region) this year (after which demand will stabilize) and wants to build a plant with a capacity of 1.5 million units per year to accommodate the growth. potential sites being considered are in north carolina and california. currently the firm pays federal, state, and local taxes on the income from each plant. federal taxes are 20 percent of income, and all state and local taxes are 7 percent of income in each state. north carolina has offered to reduce taxes for the next 10 years from 7 percent to 2 percent. blue computers would like to take the tax break into consideration when planning its network. consider income over the next 10 years in your analysis. assume that all costs remain unchanged over the 10 years. use a discount factor of 0.1 for your analysis. annual fixed costs, production and shipping costs per unit, and current regional demand (before the 50 percent growth) are shown in table 5-13. (a) if blue computers sets an objective of minimizing total fixed and variable costs, where should they build the new plant? how should the network be structured? (b) if blue computers sets an objective of maximizing after-tax profits, where should they build the new plant? how should the network be structured? variable production and shipping cost ($/unit) annual fixed cost northeast southeast midwest south west (million$) kentucky 185 180 175 175 200 150 pennsylvania 170 190 180 200 220 200 n. carolina 180 180 185 185 215 150 california 220 220 195 195 175 150 demand ('000 units/month) 700 400 400 300 600