Dresser Company sells one product. This summarizes the accounting cycle for 2016 for Dresser Company.

1. Prepare the closing entries as of Dec. 31, 2016

Journal Entries:

Dresser paid the interest due on the Bonds Payable on January 1.

Dresser paid $750 of salaries and wages, which includes the amount accrued as of December 31, 2015.

Dresser sold 4,000 units of inventory for $13.00 each.

Dresser purchased supplies on account for $1,200.

Dresser purchased 3,000 units of inventory for $1.70 each.

Dresser sold 2,800 units of inventory for $14.00 each to customers using their Dresser Company credit cards (i.e., on account). (Assume all of these sales are collected without interest. Do not record these collections at this time.)

Dresser wrote off as uncollectible the accounts of Barker Corporation ($3,200) and Elm Company ($2,500).

Dresser paid $6,800 on accounts payable.

Dresser collected $60,400 of accounts receivable.

Dresser paid the interest due on the Bonds Payable on July 1.

Dresser accepted the return of 800 units of inventory originally sold for $13.00 (journal entry 3 above). All units can be sold again and are returned to inventory at the cost when sold.

Dresser accepted a 1 year, 6%, note from Leon Company in payment of Leons $2,000 account balance. This transaction occurred on Sept. 1, with interest and principal receivable on Aug. 31, 2017.

Dresser purchased 1,500 units of inventory for $1.72 each.

Dresser collected $1,000 from Elm Company, part of the balance previously written off.

Dresser paid salaries and wages of $64,000.

Dresser paid $7,200 for insurance coverage from May 1, 2016 thru April 30, 2017.

Dresser sold 2,500 units of inventory for $15.00 each.

Dresser collected $38,500 from customers on account.

Dresser purchased 3,800 units of inventory for $1.75 each.

Dresser paid $5,500 on accounts payable.

Dresser returned 200 units of inventory that cost $1.75 each.

Dresser sold 600 units of inventory for $14.50 each as a cash sale.

Dresser paid $1,800 selling expenses and $2,650 administrative expenses.

Dresser declared and paid $4,000 in dividends to its stockholders.

Dresser accepted a $55,000, 6%, 3 year note receivable from a trusted customer for 3,000 units of inventory on October 1. The market rate of interest on Oct. 1 was 5%. Interest is received semiannually on April 1 and Oct. 1

Adjusting Journal Entries:

Prepaid insurance expires evenly each month.

A count of supplies at year end revealed $380 of supplies on hand.

Interest is recorded on the short-term note receivable.

Interest is recorded on the long-term note receivable.

Interest is recorded on the Bonds Payable.

Depreciation on the equipment is calculated using the sum-of-years-digits method. The salvage value is $2,000, life is 10 years, and 4 years are depreciated as of Dec. 31, 2015.

Depreciation on the building is calculated using the straight-line method. The salvage value is $10,000, life is 30 years, and 10 years are depreciated as of Dec. 31, 2015.

Salaries and wages payable at year end amounted to $750.

Dresser performed an aging analysis of its year end Accounts Receivable as follows:

		0-30 days	31-60 days	days	> 90 days
A/R Balance %	$ (balance)	50%	25%	15%	10%
% Uncollectible		12%	30%	60%	80%

After all entries are recorded, an entry for income tax is recorded.

Balance Sheet December 31, 2015 Liabilities and Stockholders' Equity: Assets: Current Assets: Current Liabilities: Cash 10,200 Accounts payable 7,600 12480 Interest Payable 2000 Accounts Receivable (6,250) Less Allowance for Doubtful Accounts Salary and Wages Payable 9,800 12,620 Total Current Liabilities Inventory 2,000 Prepaid Insurance 410 Long Term Liabilities 50.000 Total Current Assets 31,460 Bonds Payable, 8%, 10 year Property, Plant and Equipment Building 100,000 59.800 Total Liabilities (30,000) Less Accumulated Depreciation 60,000 Stockholders' Equity Equipment (35,855) Common Stock 55.000 Less Accumulated Depreciation 94.145 Retained Earnings 10,805 Total Property, Plant and Equipment 65,805 Total Stockholders' Equity 125,605 Total Assets Total Liabilities and Stockholders' Equity 125.605 Interest payable Jan. 1 and July 1 Inventory balance is: 8,000 5000 units at $1.60 each 4,620 2800 units at $1.65 each Total Inventory 12,620