Hassellhouf Company’s trial balance at December 31, 2017, is presented below. All 2017 transactions have been recorded except for the items described as unrecorded transactions.

Unrecorded transactions:

1. On May 1, 2017, Hassellhouf purchased equipment for $21,200 plus sales taxes of $1,600 (all paid in cash).

2. On July 1, 2017, Hassellhouf sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2017, was $1,800; 2017 depreciation prior to the sale of the equipment was $450.

3. On December 31, 2017, Hassellhouf sold on account $9,000 of inventory that cost $6,300.

4. Hassellhouf estimates that uncollectible accounts receivable at year-end is $3,500.

5. The note receivable is a one-year, 8% note dated April 1, 2017. No interest has been recorded.

6. The balance in prepaid insurance represents payment of a $3,600 6-month premium on September 1, 2017.

7. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,000.

8. The equipment owned prior to this year is being depreciated using the straight-line method over

5 years. The salvage value is 10% of cost.

9. The equipment purchased on May 1, 2017, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,800.

10. The patent was acquired on January 1, 2017, and has a useful life of 10 years from that date.

11. Unpaid salaries and wages at December 31, 2017, total $5,200.

12. The unearned rent revenue of $6,000 was received on December 1, 2017, for 3 months’ rent.

13. Both the short-term and long-term notes payable are dated January 1, 2017, and carry a 9% interest rate. All interest is payable in the next 12 months.

Instructions

(a) Prepare journal entries for the transactions listed above.

(b) Prepare an updated December 31, 2017, trial balance.

(c) Prepare a 2017 income statement and an owner’s equity statement.

(d) Prepare a December 31, 2017, classified balance sheet.

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Debit Credit $ 28,000 36,800 10,000 as Accounts Receivable Notes Receivable Interest Receivable Inventory Prepaid Insurance Land Buildings Equipment Patents Allowance for Doubtful Accounts -0 36,200 3,600 20,000 150,000 60,000 9,000 Accumulated Depreciation -Buildings Accumulated Depreciation -Equipment Accounts Payable Salaries and Wages Payable 500 50,000 24,000 27,300 Unearned Rent Revenue 6,000 11,000 Notes Payable (due in 2018) Interest Payable Notes Payable (due after 2018) Owner's Capital Owners Drawings 30,000 113,600 12,000 Sales Revenue Interest Revenue Rent Revenue 905,000 Gain on Disposal of Plant Assets Bad Debt Expense Cost of Goods Sold Depreciation Expense Insurance Expense 630,000 Interest Expense Other Operating Expenses 61,800 Amortization Expense Salaries and Wages Expense 10,000 $1,167,400 Total $1,167,400