Healthy Eating Foods Company is a distributor of nutritious snack foods such as granola bars. On December 31, 2019, the firms general ledger contained the accounts and balances that follow.

ACCOUNTS AND BALANCES
Cash	$	30,900		Dr.
Accounts Receivable		36,000		Dr.
Allowance for Doubtful Accounts		500		Cr.
Merchandise Inventory		86,800		Dr.
Supplies		11,200		Dr.
Prepaid Insurance		6,360		Dr.
Office Equipment		10,000		Dr.
Accum. DepreciationOffice Equipment		2,730		Cr.
Warehouse Equipment		38,400		Dr.
Accum. DepreciationWarehouse Equipment		11,200		Cr.
Notes PayableBank		36,000		Cr.
Accounts Payable		13,000		Cr.
Interest Payable
Social Security Tax Payable		1,760		Cr.
Medicare Tax Payable		396		Cr.
Federal Unemployment Tax Payable
State Unemployment Tax Payable
Salaries Payable
Phillip Tucker, Capital		128,696		Cr.
Phillip Tucker, Drawing		60,000		Dr.
Sales		661,778		Cr.
Sales Returns and Allowances		10,800		Dr.
Purchases		354,000		Dr.
Purchases Returns and Allowances		10,000		Cr.
Income Summary
Rent Expense		36,800		Dr.
Telephone Expense		3,000		Dr.
Salaries Expense		168,000		Dr.
Payroll Taxes Expense		13,800		Dr.
Supplies Expense
Insurance Expense
Depreciation ExpenseOffice Equip.
Depreciation ExpenseWarehouse Equip.
Uncollectible Accounts Expense
Interest Expense

ADJUSTMENTS

a.b. Merchandise inventory on December 31, 2019, is $78,800.

3. During 2019, the firm had net credit sales of $568,000; past experience indicates that 0.75 percent of these sales should result in uncollectible accounts.
4. On December 31, 2019, an inventory of supplies showed that items costing $1,260 were on hand.
5. On May 1, 2019, the firm purchased a one-year insurance policy for $6,360.
6. On January 2, 2017, the firm purchased office equipment for $10,000. At that time, the equipment was estimated to have a useful life of seven years and a salvage value of $445.
7. On January 2, 2017, the firm purchased warehouse equipment for $38,400. At that time, the equipment was estimated to have a useful life of six years and a salvage value of $4,800.
8. On November 1, 2019, the firm issued a four-month, 10 percent note for $36,000.
9. On December 31, 2019, the firm owed salaries of $12,000 that will not be paid until 2020.
10. On December 31, 2019, the firm owed the employers social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $12,000 of accrued wages.
11. On December 31, 2019, the firm owed the federal unemployment tax (assume 0.6 percent) and the state unemployment tax (assume 5.4 percent) on the entire $12,000 of accrued wages.

Required:

1. Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2019.
2. Enter the adjustments above in the Adjustments section of the worksheet.
3. Complete the worksheet.

Analyze: When the financial statements for Healthy Eating Foods Company are prepared, what net income will be reported for the period ended December 31, 2019?