Becky Olson established her corporation, Olson Sports, Inc., several years ago in Boulder, Colorado, to sell hiking and ski equipment in her store and online. The annual reporting period for the company ends December 31. Becky prepared the adjusted trial balance below at the end of 2020. However, her CPA audited the trial balance information she presented and found several items that need to be updated before financial statements can be prepared. These items are listed below Beckys trial balance. All amounts in the trial balance and in the listed items to be updated are in thousands of dollars.

OLSON SPORTS, INC.
Adjusted Trial Balance
December 31, 2020
(prepared by Becky Olson)
($ in thousands)	Debit				Credit
Cash	$	570
Accounts receivable		373
Allowance for doubtful accounts					$	18
Inventories		539
Prepaid expenses		59
Land		22
Building		189
Equipment (furniture, fixtures, and computers)		360
Accumulated depreciation						222
Software		90
Patents		1
Goodwill		161
Accounts payable						252
Accrued liabilities						182
Income taxes payable						16
Long-term debt						49
Common stock						3
Additional paid-in capital						243
Retained earnings						1,107
Sales revenue						2,487
Credit card discounts		53
Cost of sales		1,306
Advertising expense		145
Utilities expense		85
Wages expense		625
Interest expense		1
Totals	$	4,579			$	4,579

1. On the last day of the year, failed to record the $100 sale of hiking merchandise to a customer who paid with his Visa credit card. Visa charges Olson Sports a 3 percent fee.
2. On December 31, failed to write off a $3 bad debt.
3. Failed to record bad debt expense for the year. After the write-off in (b), based on an aging of the accounts receivable, Olson Sports calculated that $21 will likely be uncollectible.
4. The auditor noted that the inventory is listed on the trial balance at current cost using the first-in, first-out method. However, it should be measured using the last-in, first-out method. Beginning inventory was 15 units at $10 per unit, the April 10 purchase was 40 units at $11 per unit, the July 2 purchase was 52 units at $13 per unit, and the October 4 purchase was 28 units at $16 per unit. The count of inventory on hand at the end of the year was 35 units.
5. Failed to record $10 in new store fixtures (equipment) that arrived at Olson Sportss shipping dock during the last week of the year, with payment due to the manufacturer within 30 days. Olson Sports paid $1 cash for delivery and $3 to install the new fixtures.
6. On December 31, failed to record the sale of old computers (equipment) with a cost of $20 and a net book value of $8 for $3 cash. When they were sold, no depreciation had been recorded for the year. Olson Sports depreciates computer equipment using the straight-line method with a residual value of $4 over a four-year useful life. [Hint: Prepare two entries.]
7. Failed to amortize the accounting software that Olson Sports purchased at the beginning of the year. It is estimated to have a three-year useful life with no residual value. The company does not use a contra-account.
8. Failed to record the annual depreciation for the building and furniture (equipment):

• The building is depreciated using the straight-line method with a residual value of $9 over a 20-year useful life.
• Furniture costing $120 is depreciated using the double-declining-balance method with a residual value of $20 over a 10-year useful life. The accumulated depreciation of the furniture at the beginning of the year was $60.

9. Failed to record income tax expense for the year. Including the effects of the above entries, record Olson Sportss income tax expense at an effective rate of 24 percent.

Prepare journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit 1 Dec 31 Cash 97 Credit card discount OOO 3 Sales revenue 100 2 Dec 31 Allowance for doubtful accounts 3 Accounts receivable o 3 Dec 31 Bad debt expense 6 olol Allowance for doubtful accounts 6 4 4 Dec 31 Cost of sales 169 Inventories 169 5 Dec 31 14 Equipment Accounts payable 10 oo Cash 6 Dec 31 4 Depreciation expense Accumulated depreciation 7 Dec 31 Cash 3 16 Accumulated depreciation Loss on sale of equipment Equipment 1 20 8 Dec 31 30 Amortization expense Software olol 30 9 Dec 31 30 X Depreciation expense Accumulated depreciation 30 X 10 Dec 31 Income tax expense 33 olol Income taxes payable 33 Requirement General Ledger > expense at an effective rate of 24 percent. Requirement General Journal General Ledger Trial Balance Income Statement Statement of SE Balance Sheet Use the drop-downs to select the accounts that should be properly included on the statement of stockholders' equity and enter the appropriate amounts. (Amounts to be deducted should be indicated with a minus sign.) Dates: Dec 31 to: Dec 31 OLSON SPORTS, INC. Statement of Stockholders' Equity For the Year Ended December 31, 2020 (in thousands) Common Stock Additional Paid-in Capital Retained Earnings Total Stockholders' Equity $ 1,353 Balance, January 1, 2020 $ 3 $ 243 $ 1,107 Add: Net income 0 Balance, December 31, 2020 $ 3 $ 243 $ 1,107 $ 1,353 Prepare journal entries for transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit 1 Dec 31 Cash 97 Credit card discount OOO 3 Sales revenue 100 2 Dec 31 Allowance for doubtful accounts 3 Accounts receivable o 3 Dec 31 Bad debt expense 6 olol Allowance for doubtful accounts 6 4 4 Dec 31 Cost of sales 169 Inventories 169 5 Dec 31 14 Equipment Accounts payable 10 oo Cash 6 Dec 31 4 Depreciation expense Accumulated depreciation 7 Dec 31 Cash 3 16 Accumulated depreciation Loss on sale of equipment Equipment 1 20 8 Dec 31 30 Amortization expense Software olol 30 9 Dec 31 30 X Depreciation expense Accumulated depreciation 30 X 10 Dec 31 Income tax expense 33 olol Income taxes payable 33 Requirement General Ledger > expense at an effective rate of 24 percent. Requirement General Journal General Ledger Trial Balance Income Statement Statement of SE Balance Sheet Use the drop-downs to select the accounts that should be properly included on the statement of stockholders' equity and enter the appropriate amounts. (Amounts to be deducted should be indicated with a minus sign.) Dates: Dec 31 to: Dec 31 OLSON SPORTS, INC. Statement of Stockholders' Equity For the Year Ended December 31, 2020 (in thousands) Common Stock Additional Paid-in Capital Retained Earnings Total Stockholders' Equity $ 1,353 Balance, January 1, 2020 $ 3 $ 243 $ 1,107 Add: Net income 0 Balance, December 31, 2020 $ 3 $ 243 $ 1,107 $ 1,353