Catte Corp. has the following selected information on 1 January 2021, the beginning of its fiscal year.

The company uses a perpetual inventory system and average cost for its inventory, reporting the beginning inventory as follows:

400 units at a per-unit cost of $50 (purchased on 28 Nov. 2020)

300 units at a per-unit cost of $52 (purchased on 2 Dec. 2020)

300 units at a per-unit cost of $58 (purchased on 18 Dec. 2020)

The information of stock on 1 Jan. 2021 is as follows.

Preferred Stock: 6% cumulative, $5 par value, 20,000 shared authorized, 5,000 shared issued and outstanding	$25,000
Additional Paid in Capital, Preferred Stock	$40,000
Common Stock: $6 par value, 30,000 shares authorized, 15,000 shares issued and outstanding	$90,000
Additional Paid in Capital, Common Stock	$30,000

The account of Retained Earnings has a credit balance of $178,900.

The following transactions occurred in January 2021.

1 Jan	Sold a van purchased on 1 Jan. 2019, for $26,000 cash. The acquisition cost of the van was $53,000. The company expects to use it for a total of 160,000 km, with a residual value of $5,000. It was used in 2019 and 2020 for 33,000 km and 31,000 km respectively. The company used the units-of-production method for this van and all depreciation expense was already recorded before it was sold.
2 Jan	Issued 8,000 shares of common stock at a price of $15 per share.
5 Jan	Wrote off a $2,600 customers account balance, using the allowance method.
8 Jan	Sold 400 units of inventory to Magpie at a per-unit selling price of $110 on credit, terms 4/20, n/60.
10 Jan	Purchased 600 units of inventory from Fyfield at a per-unit cost of $60 on credit, terms 3/20, n/60.
11 Jan	Purchased 3,000 shares of its own common stock for $14 per share.
14 Jan	Return 200 units of inventory purchased on 10 Jan. to Fyfield.
18 Jan	Sold 700 units of inventory to Ebbes at a per-unit selling price of $120 by cash.
20 Jan	Received cash for the credit sales on 8 Jan.
22 Jan	Paid for the credit purchase on 10 Jan.
28 Jan	Sold 1,000 of its treasury shares at $10 per share.
29 Jan	Paid $23,755 of operating expenses.

2

30 Jan	Declared dividends of $10,000, to be paid in June 2021. The company did not declare dividends to stockholders in 2020.
31 Jan	Purchased a building and the machines for $174,000 and signed a promissory note for the purchase. The appraisal values are: $98,000 for the machines and $42,000 for the building. The company also paid $6,500 in legal fees to acquire the building.

Additional information for adjustments

1. The company purchased 5 computers on 1 Jan. 2020. The acquisition cost of these computers was $12,000. They were expected to be used for 4 years, with the residual value of $1,000. The company used the double-declining-balance method for these computers.

2. The company uses the Aging of Accounts Receivable method to estimate bad debts. The company has the following information of the past-due receivables amounts as at 31 Jan 2021.

Customer	Amount ($)	Due Date
Dover Inc.	10,500	20 Nov. 2020
Rye Inc.	26,200	20 Dec. 2020
Bakewell	18,500	20 Aug. 2020

Based on past experiences, a manager has estimated the rates of bad debt losses as follows:

	Number of Days Past-due
	1 - 30	31 60	> 60
Estimated Uncollectible %	4%	12%	25%

Before the adjustment is recorded, the Allowance for Doubtful Accounts has a $5,698 debit balance.

Instructions:

1. Prepare journal entries to record the transactions in January 2021 .

2. Prepare adjusting entries to record the depreciation expenses and estimated bad debts on 31 January 2021 .

3. Prepare the section of Stockholders Equity to be reported on Balance Sheet as at 31 January 2021 .