1. Prepare general journal entries to record the preceding transactions.

Cash	$3,090
Account Receivable	9,900
Alowance for Doubtfull Account		$100
Inventtory	17,750
Supplies	1,400
Land	9,000
Building and Equipment	42,000
Accumulated Depreciation		4,200
Accounts Payable		10,700
Common Stock (2,000 shares)		20,000
Retained Earning (1/1/2016)		42,400
Dividend	2,000
Sales Revenue		69,700
Costo of Good Sold	36,860
Salaries Expense	12,500
Advertising Expense	8,100
Other Expense	4,500
	$147,100	$147,100

Dec.	Transaction
4	Made cash sales of $7,000; the cost of the inventory sold was $3,500.
7	Purchased $3,500 of inventory on credit.
14	Collected $2,000 of accounts receivable.
18	Sold land for $8,000; the land originally cost $5,000.
20	Made credit sales of $6,000; the cost of the inventory sold was $3,000.
21	Returned $500 of defective inventory to supplier for credit to the Davis Company’s account
27	Purchased $2,500 of inventory for cash.
28	Paid $1,500 of accounts payable.
31	Purchased land at a cost of $7,000; made a $1,000 down payment and signed a 12%, 2-year note for the balance.
31	Made cash sales of $5,000; the cost of the inventory sold was $2,000.

Required:

1. Prepare general journal entries to record the preceding transactions.

2. Post to general ledger T-accounts.

3. Prepare a year-end trial balance using the following information:

(a) accrued salaries at year-end total $2,000.

(b) for simplicity, the building and equipment are being depreciated using the straight-line method over an estimated life of 20 years with no residual value. (Only for one month)

(c) supplies on hand at the end of the year total $500.

(d) bad debts expense for the year totals $1,000; and

(e) the income tax rate is 30%; income taxes are payable in the first quarter of 2017.

4. Prepare the company’s financial statements for 2016.

• Adjusted Trial Balance
• Income Statement
• Retained Earnings
• Balance Sheet

5. Prepare the 2016.

(a) adjusting and

(b) closing entries in the general journal.