Balance sheet end of 2019

Current assets

cash 4650

A/R 18260

inventory 21275

prepaid insurance 5700

total current assets 49885

property plant equipment 311000

accumulated depreciation -103500

AFS securities 2100

patent 36000

total assets 295485

current liabilities

accounts payable 25862

wages payable 1085

unearned revenue 1600

total current liabilities 28547

note payable 114000

bond payable in 2021 30000

equity common stock 1 par, 10,000 shares 10000

APIC 20800

RE 92435

accumulated other comprehensive loss -297

liabilities and equity 295485

condensed income statement 2019

sales 265320

COGS 148290

gross profit 117030

wages expense 23430

depreciation expense 15220

amortization expense 1500

insurance expense 767

interest expense 10150

other expense 3960

total expenses 55047

income before taxes 61983

income tax expense 13016

net income 48967

earnings per share 4.90

statement of stockholders equity -2019

CS APIC RE AOCI

beginning 10000 20800 47468 -422

total OCI 125

net income 48967

dividends -4000

ending balance 10000 20800 92435 -297

statement of comprehensive income

2019

net income 48967

other comprehensive income

unrealized gain on AFS debt securities 158

income tax effect -33

total other comprehensive income 125

comprehensive income 49125

Results for 2020 Sales $ 279,300 All sales on credit I

nventory Purchases on credit = 191,400 and ending inventory $56200

Depreciation expense 16,000 $ not including assets sold, bought or found

Patent purchased in 2018 and determined to have remaining useful life of 12 years in 2020

Wages Expense 29,250 $ Paid in cash 2,194 $ owed at end of 2020

Insurance policy indicates that $5,700 was paid in May 2019 for 24 month coverage starting May 1 2019.

During 2020 found an asset purchased and recorded in 2016 that had not been depreciated cost 4,230 no salvage 10 year useful life

Sold AFS Debt Securities that cost 400 for 390 in cash ($7 loss in AOCI recorded previously)

Sold equipment that cost 3,000 with accumulated depreciation of 2,690 (360 in 2020) for $200 in cash.

Purchased new equipment costing $6,975 with $2,000 down payment and 10% note payable on December 1, 2020 (first payment due January 1, 2021) 10 year useful life and no salvage

Collections on A/R = 275,320

Payments on A/P = 176,500 all accounts payable deal with inventory

All service agreements sold to customers in 2019 completed in 2020. New service agreements sold for $2460 in cash during 2020 40 percent of the services provided during 2020

Bond terms interest only for 6.5% paid annually on September 1. Firm agreement with a bank signed on December 15 to refinance bond to a 5 year note in 2021

Note Payable payment of $3,300 made March 30, June 30, Sept 30 and December 31 interest of 8% per year plus principle

Fair value of remaining AFS Debt Securities $1,405

Dec 30, 2020 paid dividends equal to $.50 per share.

Other Information Tax rate is 21% (unlike 2019 income taxes have not been paid)

Half year convention for depreciation

Required:

1. Show journal entries or T accounts for results of 2020 operations.