ACC 301 Homework 2 The unadjusted pre-closing 12/31/23 account balances for the Mahoney Company are listed below: Net Sales Net Purchases Selling Expenses Cash Machines Accumulated Depreciation Machines Accounts Payable Retained Earnings Allowance for Doubtful Accounts Building Accumulated Depreciation Building Common Stock Accounts Receivable Depreciation Expense, Machines Inventory @ 1/1/23 (periodic method used) $11,015 8.991 430 564 6.424 1,996 1.236 4.182 54 4,400 429 5.000 1.240 933 950 During your audit you discover the following five items that have yet to be recorded 1. No depreciation on the building has been recorded in 2023. Depreciation on the building is based on Double-Declining Balance. It was purchased on 1/1/21 and has an estimated useful life of 40 years. The estimated salvage value is 5700 2. Mahoney exchanged a machine for a similar machine on 12/31/23. The original machine cost $3,705 and had a book value of $2.470. The new machine had a fair value of $2,754 Mahoney also received $306 in cash. The exchange did not have commercial substance 3. Mahoney also exchanged its only other machine for a different machine on 12/31/23. The original machine cost $2,719 and had a book value of $1958. The fair value was $2.125 Mahoney paid cash of S487 as well. The exchange did not have commercial substance. 4. Mahoney uses the balance Sheet approach to adjust Accounts Receivable to Net Realizable Value. At 12/31/23, uncollectible receivables are estimated to be 5% of Accounts Receivable 5. Ending Inventory is to be estimated using the Gross Profit Method. The historic Gross Profit percentage is 22% Required a) Record journal entries for items 11-14 above; show supporting computations. In addition, compute ending inventory per 5 above show supporting computations. Then make the adjusting/closing Journal entry to close Purchases, adjust Inventory, and record CGS. Do not show other closing entries; assume they were made properly b) Draft the 2023 Condensed Income Statement and the 12/31/23 Balance Sheet