Debits Credits Cash Accounts Receivable 14,000 75,000 Allowance for U/C Accts 8,000 Inventory (5,000 units x $75 unit cost) 375,000 Furniture, Fixtures & Equipment (FF&E) (1) 1,200,000 Accumulated Depreciation - FF&E (1) 590,000 Building Warehouse (2) 480,000 Accumulated Depreciation - Warehouse (2) 262,000 Accounts Payable 8,000 Income Tax Payable Interest Payable 16,500 Notes Payable (3) 150,000 Common Stock Retained Earnings Revenue Cost of Sales Salaries Expense 350,000 738,000 1,816,000 825,000 457,000 115,000 249,000 Advertising Expense Rent Expense Income Tax Expense Depreciation Expense - FF&E 110,000 Depreciation Expense - Warehouse 22,000 Interest Expense 16,500 Dividends Loss on Sale of Warehouse Bad Debt Expense Totals 3,938,500 3,938,500 Footnotes: (1) Furniture, Fixtures & Equipment for the shop was purchased on 1/1/19 and is being depreciated over 10 years, Straight-line method with no residual value. Note, 11 months of 2023 depreciation has already been expensed. (2) Warehouse was purchased on purchased on 1/1/13 and is being depreciated over 20 years, Straight-line method with no residual value. Note, 11 months of 2023 depreciation already has been expensed. (3) The $150k Notes Payable was issued on 1/1/23 and will only be fully due on 1/1/26. Interest and note will be paid on 1/1/26 (ie., no payments until final maturity date). Interest rate is 12% annually. DS has the following transactions during the month of December 2023: Dec 1-Issue Common Stock for $100,000 and receive cash from new stockholders. Dec 3-Purchases 2,500 units of pen inventory for $78 per unit ($195,000 total) on account Dec 5-Purchases 3,500 units of pen inventory for $82 per unit ($287,000 total) on account Dec 7 - Purchases 2,900 units of pen inventory for $86 per unit ($249,400 total) on account Dec 8- Return 200 damaged units from the Dec 3rd purchase to the vendor (cost = $78 per unit/Total Cost = $15,600) Dec 10-Sells 6,300 units at $150 per unit on account - $945,000 total revenue (LIFO inventory method is used for cost purposes - Note: 2-part journal entry) Dec 11 - Receives cash of $725,000 from customers for prior sales on account Dec 13 - Pays $350,000 in cash for prior vendor purchases made on account Dec 14-Purchases 1,900 units of pen inventory for $90 per unit ($171,000 total) on account Dec 18-Sells 4,400 units at $150 per unit on account - $660,000 total (LIFO inventory method is used for cost purposes-Note: 2-part journal entry) Dec 20 - Receives cash of $745,000 from customers for prior sales on account Dec 23 - Pays $425,000 in cash for prior vendor purchases made on account Dec 28 - Write-off accounts receivable as uncollectible - $10,000 Dec 28 - Pay for employee salaries in cash - $75,000 Dec 28 - Pay for December Advertising expense in cash - $275,000 Dec 30-Pay for monthly rent in cash - $20,000 Dec 30-Pay dividends to shareholders in cash, $500,000 Dec 31 - Sell the Warehouse Building for Cash - $200,000 (Hint: Record the December Depreciation prior to recording the sale of the Warehouse). Note, this is an asset sale transaction. DS has the following adjusting entries which need to be recorded as of 12/31/23 as well: 1. Uncollectible accounts are determined using an aging methodology. The company has determined that the accounts receivable is estimated to have 6.0% as uncollectible. Please prepare the appropriate adjusting journal entry for the Accounts Receivable allowance. (Hint: Use Accounts Receivable and Allowance for Uncollectible Accts T Account balances to calculate.) 2. The Furniture, Fixtures & Equipment was purchased over 4 years ago and is being depreciated over 10 years on a straight-line basis with no residual value. DS has recorded monthly depreciation expense during 2023, but has not recorded the entry for December 2023 depreciation and will need to make the adjusting entry accordingly. 3. DS has a Notes Payable that has both the principal and interest due on 1/1/26. FSC has accrued the interest expense for the first 11 months of fiscal 2023, but has not yet recorded the entry for December 2023. Please record the December adjusting entry to recognize the interest expense. Note, the annual interest on the Notes Payable is 12%. 4. DS estimates that accrued income taxes are $55,000 for 2023. Please make the appropriate adjusting entry. Please perform the following related to DS's accounting in December 2023: 1. Record all regular journal entries and adjusting journal entries. (12 Points) Note: All of the accounts used by FSC are listed in the opening Trial Balance, but Bad Debt Expense, Income Tax Expense, Income Tax Payable, Loss on Sale of Warehouse, and Dividends are all at zero balances to start the month of December 2023. These accounts will be used in December 2023 journal entries. 2. Prepare an Adjusted Trial Balance as of 12/31/2023. (12 Points)