Healthy Eating Foods Company is a distributor of nutritious snack foods such as granola bars. On December 31, 2019, the firm's general ledger contained the accounts and balances that follow.

INSTRUCTIONS

1. Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2019.

2. Enter the adjustments in the Adjustments section of the worksheet. Identify each adjustment with the appropriate letter.

3. Complete the worksheet.

This problem will be required to complete Problem 13.4A in Chapter 13.

ACCOUNTS AND BALANCES

ADJUSTMENTS
a.-b. Merchandise inventory on December 31, 2019, is $78,000.
c. During 2019, the firm had net credit sales of $560,000; past experience indicates that
0.5 percent of these sales should result in uncollectible accounts.
d. On December 31, 2019, an inventory of supplies showed that items costing $1,180 were on hand.
e. On May 1, 2019, the firm purchased a one-year insurance policy for $5,400.
f. On January 2, 2017, the firm purchased office equipment for $8,300. At that time, the equipment was estimated to have a useful life of six years and a salvage value of $350.
g. On January 2, 2017, the firm purchased warehouse equipment for $28,000. At that time, the
equipment was estimated to have a useful life of five years and a salvage value of $4,000.
h. On November 1, 2019, the firm issued a four-month, 12 percent note for $32,000.
i. On December 31, 2019, the firm owed salaries of $5,000 that will not be paid until 2020.
j. On December 31, 2019, the firm owed the employer's social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $5,000 of accrued wages.
k. On December 31, 2019, the firm owed the federal unemployment tax (assume 0.6 percent) and the state unemployment tax (assume 5.4 percent) on the entire $5,000 of accrued wages.
Analyze:
When the financial statements for Healthy Eating Foods Company are prepared, what net income will be reported for the period ended December 31, 2019?

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Accounts Recelvable Allowance for Doubtful Accounts Merchandise Invento ry Supples Prepald Insurance Office Equlpment Accum. Depreclation-Office Equipment Warehouse Equipment Accum. Depreclation-Warehouse Equipment Notes Payable-Bank Accounts Payable Interest Payable Soclal Security Tax Payable Medicare Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable $30,100 Dr 35,200 Dr 420 Cr 86,000 Dr 10,400 Dr 5,400 Dr 8,300 Dr 2,650 Cr 28,000 Dr 9,600 Cr 32,000 Cr 12,200 Cr 1,680 C 388 Cr Salarles Payable Phillilp Tucker, Captital Phillip Tucker, Drawing 108,684 Cr 56,000 Dr 653,778 Cr 10,000 Dr 350,000 Dr 9,200 Cr. Sales Returns and Allowances Purchases Purchases Returns and Allowances Income Summary Rent Expense Telephone Expense Salarles Expense Payroll Taxes Expense Supplles Expense Insurance Expense 36,000 Dr 2,200 Dr 160,000 Dr 13,000 Dr Depreclatlon Expense-Warehouse Equip. Uncollectible Accounts Expense Interest Expense