During the month, the following transactions occurred for Trevors Supply Company. The company uses the perpetual inventory method.

Dec. 1	Accepted a 4-month, 6% note from a customer in settlement of $12,400 account.
3	Wrote off as uncollectible specific accounts totaling $680.
8	Purchased $17,200 of inventory on account, terms 2/10, n/30.
11	Sold $25,000 of inventory that cost $17,500, terms 1/15, n/45.
12	Paid $13,750 for employee salaries.
15	Customers returned $8,000 of inventory sold on December 11th that cost $5,200.
17	Collected the balance due from the December 11th sale.
18	Paid the balance due on the December 8th purchase.
24	Received $370 on an account previously written off.
27	Purchased advertising supplies for $1,300 on account.
31	Paid freight on inventory sold, $3,218.

Instructions

(a) Journalize the transactions using the accounts listed in part b. Round all amounts to the nearest dollar.

(b) Post to the T accounts. Beginning balances are already shown.

(c) Journalize the following adjustments:

1.	Interest accrual for the note.
2.	Bad debts are expected to be 20% of the ending accounts receivable.
3.	A count of advertising supplies at month end, reveals that $560 remains unused.
4.	The income tax rate is 30% based on $9,645 taxable income.

(d) Post adjusting entries to the T accounts.

(e) Prepare a trial balance.

(f) Prepare the financial statements for the year ending December 31. The income statement should be formatted as a Multiple Step Income Statement as detailed in Chapter 5.

(g) Ratio analysis