Digital Home, Incorporated (DHI) is a company that sells and installs smart kitchen appliances, such as refrigerators, ovens, and dishwashers. The company is located in Dayton, Ohio. The company owns their office building. The companys bookkeeper is not trained in accounting. He can record simple daily transactions, collect receivables, and pay vendors. Payroll is outsourced to a payroll company. Whenever the bookkeeper encountered a transaction he did not know how to journalize, he added it to a list. Your job is to record those transactions that were not recorded by the bookkeeper. You will also need to prepare some adjusting entries and year-end financial statements.

DHI uses straight-line depreciation (for both financial accounting and its tax return) and depreciates assets to the nearest whole month in use during the year. The company uses the perpetual LIFO inventory method with lower of cost or net realizable value applied to individual items. Purchases and sales are recorded using the gross method. Adjustments are only recorded at the end of the fiscal year unless otherwise noted.

DHI has 300,000 shares of $8.00 par value common stock authorized. The corporation uses the cost method of accounting for treasury stock. DHI prepares all financial statements in accordance with GAAP. DHIs incremental borrowing rate is 7%. The companys common stock was selling for $25 per share throughout the entire last quarter of 2023.

Make a Journal entry for the following (bolded) questions

1. DHI sold 60 shares of treasury stock for $25 per share on August 1, 2023.
2. DHI declared a 5% stock dividend on its common stock on December 18. The stock dividend was distributed on December 30, 2023.
3. DHI declared and paid the regular dividend on its preferred stock in December 2023. DHIs preferred stock is convertible, cumulative preferred stock. There are no dividends in arrears. Each share of preferred stock can be converted into 4 shares of common stock. To date, none of the preferred stock has been converted.
4. On June 30, 2023, DHI purchased stock of Folton Security Systems. DHI wanted to establish a relationship with this company because Folton sells and installs smart home security systems. DHI purchased 1,000 shares of Foltons common stock for $16 per share. Folton has issued a total of 3,000 shares of common stock. At year end, the Folton stock was selling for $20 per share. Foltons net income for 2023 was $90,000. DHI received a $700 dividend from Folton in 2023. DHI intends to hold on to this stock indefinitely.
5. 

\begin{tabular}{|c|c|c|c|c|c|} \hline \multicolumn{3}{|c|}{ Digital Home, Incorporated (DHI) } & \multicolumn{3}{|c|}{ Digital Home, Incorporated (DHI) } \\ \hline \multicolumn{3}{|c|}{ Preliminary Trial Balance } & \multicolumn{3}{|c|}{ Post Closing Trial Balance } \\ \hline \multicolumn{3}{|c|}{ December 31, 2023} & \multicolumn{3}{|c|}{ December 31, 2022} \\ \hline & Debit & Credit & & Debit & Credit \\ \hline Cash & 34,000 & & Cash & 20,100 & \\ \hline Accounts Receivable & 56,500 & & Accounts Receivable & 36,000 & \\ \hline Allowance for Doubtful Accounts & & 300 & Allowance for Doubtful Accounts & & 1,900 \\ \hline Inventory & 98,500 & & Inventory & 72,500 & \\ \hline Equipment & 261,000 & & Equipment & 172,000 & \\ \hline Accum Deprec-Equip & & 19,200 & Accum Deprec-Equip & & 19,200 \\ \hline Building & 280,000 & & Building & 280,000 & \\ \hline Accum Deprec-Building & & 27,000 & Accum Deprec-Building & & 27,000 \\ \hline Land & 90,000 & & Land & 90,000 & \\ \hline Accounts Payable & & 87,500 & Accounts Payable & & 137,930 \\ \hline Note Payable & & $250,000 & Interest Payable & & 820 \\ \hline Discount on Notes Payable & 31,640 & & Note Payable & & 250,000 \\ \hline Preferred Stock, 6\%, \$100 par & & 50,000 & Discount on Notes Payable & 31,640 & \\ \hline Paid in Capital - Preferred Stock & & 3,700 & Preferred Stock, 6\%, \$100 par & & 50,000 \\ \hline Common Stock (\$8 par) & & 80,000 & Paid in Capital - Preferred Stock & & 3,700 \\ \hline Paid in Capital - Common Stock & & 26,400 & Common Stock, \$8 par & & 80,000 \\ \hline Retained Earnings & & 107,490 & Paid in Capital - Common Stock & & 26,400 \\ \hline Treasury Stock (100 shares) & 2,200 & & Retained Earnings & & 107,490 \\ \hline Sales & & 798,750 & Treasury Stock (100 shares) & 2,200 & \\ \hline Installation Revenue & & 75,600 & & 704,440 & 704,440 \\ \hline Cost of Goods Sold & 392,000 & & & & \\ \hline Operating Expenses & 226,900 & & & & \\ \hline Interest Expense & 4,700 & & & & \\ \hline \multirow[t]{2}{*}{ Income Tax Expense } & 48,500 & & & & \\ \hline & 1,525,940 & 1,525,940 & & & \\ \hline \end{tabular}