Paulson Corporation??s unadjusted trial balance at December 1, 2012, is presented below.

The following transactions occurred during December.Dec. 2 Paulson purchased equipment for $16,000, plus sales taxes of $800 (all paid in cash).2 Paulson sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2012, was $1,800; 2012 depreciation prior to the sale of equipment was $450.15 Paulson sold for $5,000 on account inventory that cost $3,500.23 Salaries and wages of $6,600 were paid.Adjustment data:1. Paulson estimates that uncollectible accounts receivable at year-end are $4,000.2. The note receivable is a one-year, 8% note dated April 1, 2012. No interest has been recorded.3. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1, 2012.4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,000.5. 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.6. The equipment purchased on December 2, 2012, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,800.7. The patent was acquired on January 1, 2012, and has a useful life of 9 years from that date.8. Unpaid salaries at December 31, 2012, total $2,200.9. Both the short-term and long-term notes payable are dated January 1, 2012, and carry a 10% interest rate. All interest is payable in the next 12 months.10. Income tax expense was $15,000. It was unpaid at December 31.Instructions(a) Prepare journal entries for the transactions listed above and adjusting entries.(b) Prepare an adjusted trial balance at December 31, 2012.(c) Prepare a 2012 income statement and a 2012 retained earnings statement.(d) Prepare a December 31, 2012, balance sheet.

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Debit Credit $ 22,000 Cash Accounts Receivable Notes Receivable 36,800 10,000 Interest Receivable Inventory Prepaid Insurance -0- 36,200 3,600 Land 20,000 Buildings Equipment 150,000 60,000 9,000 Patent Allowance for Doubtful Accounts 500 Accumulated Depreciation-Buildings Accumulated Depreciation-Equipment Accounts Payable Salaries and Wages Payable Notes Payable (due April 30, 2013) Interest Payable Notes Payable (due in 2018) 50,000 24,000 27,300 -0- 11,000 -0- 35,000 Common Stock 50,000 Retained Earnings Dividends 63,600 12,000 Sales Revenue 900,000 Interest Revenue -0- Gain on Disposal of Plant Assets Bad Debts Expense Cost of Goods Sold -0- -0- 630,000 Depreciation Expense Insurance Expense Interest Expense Other Operating Expenses Amortization Expense Salaries and Wages Expense -0- -0- -0- 61,800 -0- 110,000 Total $1,161,400 $1,161,400