Indigo Corporation's unadjusted trial balance at December 1, 2017 is presented below. Debit Credit $26,300 35,000 9,000 0 36,270 3,900 20.700 156,600 61.000 9,720 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 Payable Notes Payable (due in 2023) Common Stock Retained Earnings Dividends Sales Revenue Interest Revenue Gainan Dicroclima Ascoli $600 52,200 24,400 27.000 0 11,700 0 35,200 53,400 48,590 12,500 925,500 0 0 0 637.500 0 0 Interest Revenue Gain on Disposal of Plant Assets Bad Debt Expense Cost of Goods Sold Depreciation Expense Income Tax Experise Insurance Expense Interest Expense Other Operating Expenses Amortization Expense Salaries and Wages Expense Total 0 0 61,600 0 108.500 $1,178,590 $1,178,590 The following transactions occurred during December. Dec. 2 Purchased equipment for $17.400, plus sales taxes of $1,200 (paid in cash). 2 Indigo sold for $3,600 equipment which originally cost $5,400. Accumulated depreciation on this equipment at January 1, 2017, was $1,800; 2017 depreciation prior to the sale of equipment was $490. Indigo sold for $5.050 on account inventory that cost $3,490. Salaries and wages of $6,770 were paid. 15 23 Adjustment data: 1. 2. 3. Indigo estimates that uncollectible accounts receivable at year-end are $3,840. The note receivable is a one-year, 8% note dated April 1, 2017. No interest has been recorded. The balance in prepaid insurance represents payment of a $3,900, 6-month premium on September 1, 2017 The buildimbaddecidindatheda Amebadiovadberat 1 Adjustment data: 1 2 3 4. 5 6 Indigo estimates that uncollectible accounts receivable at year-end are 53.840 The note receivable is a one-year, 8. note dated April 1. 2017. No interest has been recorded The balance in prepaid insurance represents payment of a $3,900, 6-month premium on September 1, 2017 The building is being depreciated using the straight-line method over 30 years. The salvage value is $31.500. 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. 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 The patent was acquired on January 1, 2017, and has a useful life of 9 years from that date. Unpaid salaries at December 31, 2017 total $2.010 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 Income tax expense was $13.700. It was unpaid at December 31 7. 8 9. 10 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. I no entry is required, select "No Entry" for the account titles and enter for the amounts. Recordjoumal entries in the order presented in the problem) Account Titles and Explanation Debit Cred Date (To record depreciation expense on equipment) (To record sale of equipment.) (To record sales revenue) O To record cost of goods sold.) 1 2. 4. 5 6 7 os