ES Comprehensive Accounting Cycle Review 9-1 (Part Level Submission) Novak Corp.'s unadjusted trial balance at December 1, 2017, is presented below. Credit Debit $26,000 36,700 8,600 aly 0 Cash Accounts Receivable Notes Receivable Interest Receivable Inventory Prepaid Insurance Land Buildings Equipment Patent Allowance for Doubtful Accounts Accumulated Depreciation--Buildings Accumulated Depreciation Equipment Accounts Payable Salaries and Wages Payable Notes Payable (due April 30, 2018) Income Taxes Payable Interest Darahlo 36,420 3,300 21,000 164,400 60,500 9,720 $450 54,800 24,200 27,600 0 11,700 0 Notes Payable (due in 2023) Common Stock Retained Earnings Dividends 36,000 57,300 40,290 12,000 Sales Revenue 923,000 0 0 0 630,000 0 Interest Revenue Gain on Disposal of Plant Assets Bad Debt Expense Cost of Goods Sold Depreciation Expense Income Tax Expense Insurance Expense Interest Expense Other Operating Expenses Amortization Expense Salaries and Wages Expense Total 0 0 0 61,700 0 105,000 $1,175,340 $1,175,340 BACK The following transactions occurred during December Dec. 2 Purchased equipment for $16,800, plus sales taxes of $600 (paid in cash). 2 Novak sold for $3,550 equipment which originally cost $5,400. Accumulated depreciation on this equipment at January 1, 2017, was $2,000; 2017 depreciation prior to the sale of equipment was $470. 15 Novak sold for $5,000 on account inventory that cost $3,330. 23 Salaries and wages of $6,680 were paid. Adjustment data: 1. Novak estimates that uncollectible accounts receivable at year-end are $4,130. 2. The note receivable is a one-year, 8% note dated April 1, 2017. No interest has been recorded. 3. The balance in prepaid insurance represents payment of a $3,300, 6-month premium on September 1, 2017. 4. The building is being depreciated using the straight-line method over 30 years. The salvage value is $31,800. 5. 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. 6. The equipment purchased on December 2, 2017, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,980. 7. The patent was acquired on January 1, 2017, and has a useful life of 9 years from that date. 8. Unpaid salaries at December 31, 2017, total $2,150. 9. Both the short-term and long-term notes payable are dated January 1, 2017, and carry a 10% interest rate. All interest is payable in the next 12 months. 10 Income tax expense was $12,200. It was unpaid at December 31. (a) Prepare journal entries for the transactions listed above and adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts. Record fournal entries in the order presented in the problem Part 3 Prepare a 2017 income statement. NOVAK CORP. Income Statement For the Year Ended December 31, 2017 Sales Revenues