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Novel Company On December 31, 2016, Novel Company had the following account balances: Trial Balance (unadjusted) Debit Credit Cash 1,900 4,700 Accounts Receivable Allowance for Doubtful Accounts S 60 Inventory 8,700 Prepaid Insurance Expense 600 Land 4,100 38,000 Buildings Accumulated Depreciation: Buildings Equipment Accumulated Depreciation: Equipment Accounts Payable Notes Payable (due March 1, 2017) 11,500 10,700 3,100 4,300 1,400 Unearned Rent Revenue 1,200 Mortgage Payable (due Jan. 1, 2018) Common Stock (2000 shares) Retained Earnings (as of 1/1/2016) 7,300 10,000 18,075 Dividends 1,300 Sales Revenue 49,355 Cost of Goods Sold 27,185 Salaries Expense Utilities Expense Office Supplies Expense Delivery Expense Other Expenses 4,080 2,000 770 1,275 980 Further, the company has the following additional adjustment information: (a) Depreciation on buildings was $1,100, and on equipment, $600 (b) Bad debt expense was $240. (c) Interest accumulated but not yet paid was $50 on the note payable, and $530 on the mortgage payable (d) $175 worth of insurance used (expired). (e) Salaries accrued but not yet paid were $370. (f) Rent that was collected in advance and is now earned at year-end was $800. (g) The income tax rate is 30% on current income and is payable in the first quarter of 2017. Required: 1) Record the appropriate adjusting entries for the above transactions from (a) to (g). 2) Prepare the Income Statement and Balance Sheet for 2016. Trial Balance (unadjusted) Debit 1.900 Income Statement Cuadi Retained Earnings Balance Sheet Adjustments Credit Credit Debit Credit Debit Debit Debit Credit Cash Accounts Receivable 4,700 Allowance for Doubtful Accounts 60 Inventory 8.700 Prepaid Insurance Land 600 4,100 38,000 Buildings Accumulated Deprcciation: Buildings Equipment Accumulated Depreciation: Equipment Accounts Payable Notes Payable (duc March 1, 2017) Unearned Rent 11,500 10,700 3,100 4,300 1,400 1,200 Mortgage Payable (due Jan. 1, 2018) Common Stock (2000 shares) Retained Earnings (as of 1/1/2016) Dividends Sales Revenue 7,300 10,000 18,075 1,300 49,355 Cost of Goods Sold 27,185 Salarics Expense Utilities Expense Office Supplies Expense Delivery Expense Other Expenses 4,080 2.000 770 1,275 980 Novel Company Balance Sheet As of December 31, 2016 Current Assets: Cash Accounts Receivable Less: Allowance for Doubtful Accounts Inventory Prepaid Insurance Expense Total Current Assets Long-Term Assets: Land Buildings Less: Accumulated Depreciation Equipment Less: Accumulated Depreciation Total Long-term Assets Total Assets Current Liabilities: Accounts Payable Note Payable (due March 1, 2017) Interest Payable Salaries Payable Unearned Rent Revenue Income Taxes Payable Total Current Liabilities Long-Term Liabilities: Mortgage Payable (due January 1, 2018) Total Liabilities Contributed Capital: Common Stock (2000 shares) Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity Novel Company Income Statement For the Year Ended December 31, 2016 Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: Salaries Expense Utilities Expense Office Supplies Expense Delivery Expense Depreciation Expense Bad debt Expense Insurance Expense Other Expenses Total Operating Expenses Income from Operations Other Items: Rental Income Interest Expense Net Other Items Income Before Income Taxes Income Tax Expense Net Income Earnings Per Share (2000 shares)