Comprehensive Problem 9 (Part Level Submission)

Blue Spruce Companys trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described following the trial balance.

	Debit		Credit
Cash	$26,000
Accounts Receivable	36,500
Notes Receivable	8,900
Interest Receivable	0
Inventory	36,200
Prepaid Insurance	3,780
Land	21,800
Buildings	132,000
Equipment	55,000
Patents	10,300
Allowance for Doubtful Accounts			$400
Accumulated DepreciationBuildings			44,000
Accumulated DepreciationEquipment			22,000
Accounts Payable			27,100
Salaries and Wages Payable			0
Unearned Rent Revenue			3,300
Notes Payable (due in 2020)			13,000
Interest Payable			0
Notes Payable (due after 2020)			36,000
Common Stock			46,500
Retained Earnings			57,580
Dividends	15,000
Sales Revenue			903,000
Interest Revenue			0
Rent Revenue			0
Gain on Disposal of Plant Assets			0
Bad Debts Expense	0
Cost of Goods Sold	640,000
Depreciation Expense	0
Insurance Expense	0
Interest Expense	0
Other Operating Expenses	61,400
Amortization Expense	0
Salaries and Wages Expense	106,000
Total	$1,152,880		$1,152,880

Unrecorded transactions:

1.		On May 1, 2020, Blue Spruce purchased equipment for $17,800 plus sales taxes of $1,400 (all paid in cash).
2.		On July 1, 2020, Blue Spruce sold for $3,600 equipment which originally cost $5,100. Accumulated depreciation on this equipment at January 1, 2020, was $2,000; 2020 depreciation prior to the sale of the equipment was $450.
3.		On December 31, 2020, Blue Spruce sold on account $5,400 of inventory that cost $3,200.
4.		Blue Spruce estimates that uncollectible accounts receivable at year-end is $4,000.
5.		The note receivable is a one-year, 8% note dated April 1, 2020. No interest has been recorded.
6.		The balance in prepaid insurance represents payment of a $3,780 6-month premium on September 1, 2020.
7.		The buildings are being depreciated using the straight-line method over 30 years. The salvage value is $30,000.
8.		The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost.
9.		The equipment purchased on May 1, 2020, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,100.
10.		The patent was acquired on January 1, 2020, and has a useful life of 10 years from that date.
11.		Unpaid salaries and wages at December 31, 2020, total $2,200.
12.		The unearned rent revenue of $3,300 was received on December 1, 2020, for 3 months rent.
13.		Both the short-term and long-term notes payable are dated January 1, 2020, and carry a 9% interest rate. All interest is payable in the next 12 months.

Transcribed image text: Prepare a 2020 income statement. Blue Spruce Corp. Income Statement V