mcdonald's corp (MCD:New York)Financial Statements for mcdonald's corp (MCD)Financial Statements for mcdonald's corp (MCD)Team A Week 5 ProblemsPE-2, page 862In January 2012, the administration of Sarah Company determined that it has enough money to buy transient investments in debt and stock securities. In the course of the year, these are the transactions that happened.Feb. 1 Purchased 1,200 shares of NJF common stock for $50,600 plus brokeragefees of $1,000.Mar. 1 Purchased 500 shares of SEK common stock for $18,000 plus brokeragefees of $500.Apr. 1 Purchased 70 $1,000, 8% CRT bonds for $70,000 plus $1,200 brokeragefees. Interest is payable semiannually on April 1 and October 1.July 1 Received a cash dividend of $0.80 per share on the NJF common stock.Aug. 1 Sold 200 shares of NJF common stock at $42 per share less brokeragefees of $350.Sept. 1 Received $2 per share cash dividend on the SEK common stock.Oct. 1 Received the semiannual interest on the CRT bonds.Oct. 1 Sold the CRT bonds for $77,000 less $1,300 brokerage fees.The fair values of the NJK and SEK common stocks were at $39 and $30 in every corresponding share at December 31.Instructions(a) Journalize the transactions and post to the accounts Debt Investments and StockInvestments. (Use the T account form.)(b) Prepare the adjusting entry at December 31, 2012, to report the investments at fairvalue. All securities are considered to be trading securities.(c) Show the balance sheet presentation of investment securities at December 31, 2012.(d) Identify the income statement accounts and give the statement classification of eachaccount.  < < <GENERALJOURNAL  < < << < < < < < < < << < < < <  < < < Date  Account Titles and Explanation  Debit CreditFeb 1 Stock Investments    51600   Cash       51600  (To record purchase of 1200 shares     of NJF common stock)             Mar 1 Stock Investments    18500   Cash       18500  (To record purchase of 500 shares     of SEK common stock)             Apr 1 Debt Investments    71200   Cash       71200  (To record purchase of 70 CRT Bonds)            Jul 1 Cash (1200 x 0.80)    960   Dividend Revenue     960  (to record receipt of a cash dividend NJF)            Aug 1 Cash      8050   Loss on Sale of Investments   550   Stock Investments     8600  (To record sale of 200 shares of NJF     common stock)              Sept 1 Cash (500 x 2.00)    1000   Dividend Revenue     1000  (to record receipt of a cash dividend)            Oct 1 Cash      2800   Interest Revenue     2800  (To record receipt of interest on CRT bonds)            Oct 1 Cash      75700   Debt investment     71200  Gain on sale of investments    4500  (To record sale of CRT bonds)            Dec 31 Unrealized Loss - Income   7500   Market Adjustment Trading       7500  (to record unrealized loss on trading securities                     CASH Stock Investments Debt Investment960 51600 51600 8600 71200 712008050 18500 185001000 71200280075700Dividend Revenue Loss on Sale of Investments Interest Revenue960 550 28001000Gain on Sale of Investments Unrealized Loss - Income Market Adjustment Trading4500 7500 7500< < < < Sarah Company < < << < < <Balance Sheet(partial) < < << < 31-Dec-12 << < < < < < < <Current Assets < < < < < < Short-term investments, at fair value < < 54000< < < < < < < << < < < < < < <Other Revenue & Gains - Dividend Revenue- Interest Revenue- Gain on Sale of InvestmentsOther Expenses & Losses- Loss on Sale of Investments- Unrealized LossE7-5 In the Reyes Company, checks are currently not prenumbered for the purchasing client andthe treasurer are both permitted to provide checks. Every benefactor has authorization to withheld checks stored in an open vault or cabinet. The purchasing agents pays all the charges involving the merchandise bought for resale. Before the payment, the purchasing agent confirms that the merchandise have been acquired and validates the precise calculation of the vendors’ receipt. After the transaction, the receipt is kept by the vendor and the purchasing agent lists the payment in the cash disbursements journal. The treasurer pays the remaining charges after the verification by the administrators. After the payment, the treasurer seals all transactions with “paid”, sorts them according to payment date and lists the check in the cash disbursements journal. The Reyes Company retains one checking account that is reconciled through the treasurer.Instructions(a) List the weaknesses in internal control over cash disbursements.1. No prenumbered checks.2. Checks are kept in unlocked cabinet3. No segregation of duties (b) Identify improvements for correcting these weaknesses.1. Order prenumbered checks.2. Lock disbursements and keep in separate area from others3. Segregate approvers, buyers, signers, treasury, account reconcilers.4. Filing improvements5. More than one signer needed for checks.E7-6At January 31, Tasha Orin is not capable to adjust the bank balance. Tasha’s reconciliation is the following:Cash balance per bank $3,677.20Add: NSF check 450.00Less: Bank service charge 28.00Adjusted balance per bank $4,099.20Cash balance per books $3,975.20Less: Deposits in transit 590.00Add: Outstanding checks 770.00Adjusted balance per books $4,155.20Instructions(a) What is the proper adjusted cash balance per bank? 3497.20(b) What is the proper adjusted cash balance per books? 3497.20(c) Prepare the adjusting journal entries necessary to determine the adjusted cash balanceper books.