Debit Credit Cash $22,700 Accounts Receivable 35,300 Notes Receivable 10,200 Interest Receivable 0 Inventory 39,100 Prepaid Insurance 3,600 Land 19,500 Buildings 159.000 Equipment 62,000 Patent 9,000 Allowance for Doubtful Accounts Accumulated Depreciation-Buildings $400 53,000 Accumulated Depreciation-Equipment 24,800 Accounts Payable 28,300 Salaries and Wages Payable 0 Notes Payable (due April 30, 2023) 11,100 Income Taxes Payable 0 Interest Payable 0 Interest Payable Notes Payable (due in 2028) Common Stock Retained Earnings 0 36,300 55,000 85,700 Dividends 10,900 Screenshot (2).png Sales Revenue 903,000 Interest Revenue 0 Gain on Disposal of Plant Assets 0 Bad Debt Expense Cost of Goods Sold 0 654,000 Depreciation Expense Income Tax Expense 0 0 Insurance Expense 0 Interest Expense 0 Other Operating Expenses 64,300 Amortization Expense 0 Salaries and Wages Expense 108,000 Total $1,197,600 $1,197,600 Dec. 2 Purchased equipment for $16,700, plus sales taxes of $900 (paid in cash). 2 Martinez sold for $3,800 equipment which originally cost $5,100. Accumulated depreciation on this equipment at January 1, 2022, was $1,800; 2022 depreciation prior to the sale of equipment was $875. 15 Martinez sold for $4,700 on account inventory that cost $3,700. 23 Salaries and wages of $6,600 were paid for December. Screenshot (3).png Adjustment data: 1. Martinez estimates that uncollectible accounts receivable at year-end are $3,900. 2. The note receivable is a 1-year, 8% note dated April 1, 2022. No interest has been recorded. 3. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1, 2022. 4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $33,000. 5. 6. 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. The equipment purchased on December 2, 2022, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,400. The patent was acquired on January 1, 2022, and has a useful life of 9 years from that date. 7. 8. Unpaid salaries at December 31, 2022, total $2,400. 9. 10 Both the short-term and long-term notes payable are dated January 1, 2022, and carry a 10% interest rate. All interest is payable in the next 12 months. Income tax expense was $16,000. It was unpaid at December 31. Dec. 2 Screenshot (4).png Equipment Cash Dec. 2 Depreciation Expense Accumulated Depreciation-Equipment (To record depreciation expense on equipment.) Cash Accumulated Depreciation-Equipment Equipment Gain on Disposal of Plant Assets (To record sale of equipment.) Accounts Receivable Sales Revenue (To record sales revenue.) Cost of Goods Sold Inventory 17600 875 3800 875 (To record cost of goods sold.) Salaries and Wages Expense Cash 1. Bad Debt Expense Allowance for Doubtful Accounts 2. Interest Receivable Interest Revenue 3. Insurance Expense Prepaid Insurance 4. Depreciation Expense Accumulated Depreciation-Buildings 5. Depreciation Expense Accumulated Depreciation-Equipment 6. Depreciation Expense 6. Depreciation Expense Accumulated Depreciation-Equipment 7. Amortization Expense Screenshot (6).png 8. Salaries and Wages Expense Salaries and Wages Payable 9. Interest Expense Interest Payable 10. Income Tax Expense Income Taxes Payable