A. Supplies on hand at year-end are $1,200.

B. Six months of rent ($24,000) was paid in advanced on September 1st. No rent expense has been recorded since that date.

C. Depreciation expense has not been recorded on the building for 2018. The building has a useful life of 20 years. Bust-a-Move Snowboard uses straight-line depreciation for all asset classifications.

D. Depreciation expense has not been recorded for the equipment for 2018. The equipment has a useful life of 10 years and a salvage value of $5,000.

E. Employees work Monday through Friday. The weekly payroll is $7,500 and is paid every Friday. December 31st is a Wednesday.

F. Revenue of $24,000 must be accrued (Note: The earnings process is complete but the amount has not been received from customer).

G. Smugglers' Notch (a customer) paid $36,000 in advance on September 1, 2018 for services to be provided evenly from October 1, 2018 through March 31, 2019. None of the revenue has yet been recorded. H. Management has been made aware that $5,000 of the current accounts receivable is deemed uncollectible. Management has asked that this amount be written off immediately.

I. 1,000 snowboard helmets in the amount of $25,000 were ordered on December 15th and were shipped fob shipping point on December 21st. To date the inventory has not been received. The invoice has not yet been received.

J. On December 31st, Management decides to sell one piece of equipment with a historical cost of $15,000, and accumulated depreciation of $3,000. At the end of its useful life this equipment was previously deemed to have no salvage value. Cash proceeds on this sale were $10,000.

Transaction has not been recorded.

K. No amortization has been recorded for Bust-A-Move Snowboard's intangible assets. Goodwill was acquired

through Bust-A-Move Snowboard's purchase of TJX Shoppe in 2010. The Company has made the election prospectively in the current year to amortize per the PCC guidance. No impairment has been noted.

L. The patent was acquired in 2018 after years of research and development. Legal fees for the patent were $15,500 on January 1, 2018. On that date patent was deemed to have a useful life of 5 years.

On December 1, 2018 Bust-a-Move Snowboard, Inc. successfully defended its patent from Burton Snowboards. The costs incurred amounted to $15,000. This transaction has not yet been recorded and has extended the useful life of the patent for 8 years from the date of defense. Any costs incurred were paid in cash.

M. In accordance with Generally Accepted Accounting Principles, Bust-a-Move Snowboard must record their inventory in accordance with the Lower Cost or Market concept. Use the indirect method when recording your proposed entry.

Inventory is inclusive of the following:

N. No dividends are to be declared for 2018.

O. Management uses the percentage-of-receivables approach for estimating the percent of receivables

that will become uncollectible. They have determined that allowance for doubtful accounts should represent 3.5% of the accounts receivable balance, initiating a 1% increase due to the economic circumstances of many of its customers. Adjustment should be made based on the adjusted accounts receivable balance.

Note: 2018 Tax rate is 30%.

4. Prepare an adjusted trial balance.

5. Prepare the multiple step Income Statement, Statement of Retained Earnings, and classified Balance Sheet. 6. Prepare and post all closing entries. 7. Prepare a post closing trial balance.

Please show accurate calculations. Thank you.

Profit Margin 23% Replacement Inventory Item # of Items Cost Cost Selling Price Costs to Sell Bindings 58 $ 52.00 $ 55.00 $ 65.00 $ 5.00 Snowboards 345 $ 131.00 $ 127.50 $ 250.00 $ 15.00 Boots 144 S 41.00 $ 55.00 $ 55.50 $ 5.00 Helmets 1,000 $ 25.00 $ 20.00 $ 35.00 $ 2.50 28%|| 29% Current Year Unaajusted Trial Balance Trial balance December 31, 2018 Account Title Debit Credit 124,000 96,000 2,400 54,115 24,000 6,000 48,000 250,000 75,000 50,000 21,000 Cash Accounts Receivable Allowance for Doubtful accounts Inventory Prepaid Rent Supplies Land Building Equipment Accumulated Depreciation, Building Accumulated Depreciation, Equipment Goodwill Patent Accounts Payable Notes Payable Uneared Service Revenue Common Stock Retained Earnings Revenue Salary Expense Cost of Goods Sold Advertising Expense Rent Expense Miscellaneous Expense 35,500 15,500 132,715 178,000 122,000 96,000 126,000 689,000 $ 440,000 201,000 15,000 32,000 1,000 1.417.115 $ $ 1,417,115 Profit Margin 23% Replacement Inventory Item # of Items Cost Cost Selling Price Costs to Sell Bindings 58 $ 52.00 $ 55.00 $ 65.00 $ 5.00 Snowboards 345 $ 131.00 $ 127.50 $ 250.00 $ 15.00 Boots 144 S 41.00 $ 55.00 $ 55.50 $ 5.00 Helmets 1,000 $ 25.00 $ 20.00 $ 35.00 $ 2.50 28%|| 29% Current Year Unaajusted Trial Balance Trial balance December 31, 2018 Account Title Debit Credit 124,000 96,000 2,400 54,115 24,000 6,000 48,000 250,000 75,000 50,000 21,000 Cash Accounts Receivable Allowance for Doubtful accounts Inventory Prepaid Rent Supplies Land Building Equipment Accumulated Depreciation, Building Accumulated Depreciation, Equipment Goodwill Patent Accounts Payable Notes Payable Uneared Service Revenue Common Stock Retained Earnings Revenue Salary Expense Cost of Goods Sold Advertising Expense Rent Expense Miscellaneous Expense 35,500 15,500 132,715 178,000 122,000 96,000 126,000 689,000 $ 440,000 201,000 15,000 32,000 1,000 1.417.115 $ $ 1,417,115