Infometrix Inc. completed its fourth year of operations on December 31, 2010. A student working in the companys office on a part-time basis assembled the following list of accounts and their related balances. The accounts are not arranged in any particular order.

Account Title	Balance	Account Title	Balance
Cost of goods sold	$590,000	Accounts receivables	$150,000
Inventory	140,000	Cash	54,000
Equipment	200,000	Building	320,000
Accumulated depreciation equipment	20,000	Accounts payables	68,600
Retained earnings, January 1, 2010	177,000	Unearned rent revenue	6,000
Accumulated depreciation building	40,000	Salaries expense	120,000
Note payable	30,000	Note receivable	30,000
Sales revenue	983,000	Share capital (10,000 shares)	570,000
Interest expense	2,400	Land	160,000
Advertising expense	76,000	Dividends	12,000
Insurance expense	6,300	Office supplies inventory	8,900

Each of the account balances above has a "normal" balance, as the term is defined in the textbook. The following additional information was not taken into consideration in determining the account balances:

The amount shown as insurance expense includes $900 for coverage during the first two months of 2011.

The note receivable was received on September 1, 2010 and carries an interest rate of 10 percent per year. Interest on the note will be received by the company when the note becomes due on February 28, 2011.

The building is depreciated over 40 years on a straight-line basis with no salvage value. Depreciation on the equipment was determined to be $10,000 per year.

Additional dividends of $50,000 were declared in December 2010, but will not be paid until January 2011.

The cost of office supplies still on hand at December 31, 2010 is $600.

The company rented surplus space in its building to a tenant on November 1, 2010 for $1,000 per month, payable in advance for six months. The entire amount received was credited to Unearned rent revenue.

Employees earned $3,000 of salaries in December 2010 that will be paid on the first pay day in January 2011.

The company is subject to an income tax rate of 30 percent. Income taxes for the year 2010 will be paid on March 15, 2011.

Required (show all calculations):

Prepare the necessary adjusting journal entries as at December 31, 2010 for events (a) to (h) above. You may wish to complete requirement 2 (below) before recording the journal entry for item (h). Please skip a line between journal entries, and omit narrative explanations. Set up new accounts if needed.

Prepare, in proper form, a "multi-step" income statement for Infometrix Inc. for the year ended December 31, 2010.

Prepare in proper form the Assets section of a classified statement of financial position for Infometrix Inc. as at December 31, 2010. A complete statement of financial position is not required.

Question 5: Broadway Limited had an $800 credit balance in Allowance for Doubtful Accounts at December 31, 2018, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following:

Estimated Percentage

Uncollectible

Current Accounts....................................... $150,000 1%

1-30 days past due..................................... 15,000 3%

31-60 days past due................................... 8,000 6%

61-90 days past due................................... 5,000 12%

Over 90 days past due................................ 6,000 30%

Total Accounts Receivable........................ $184,000

Instructions

(a) Prepare the adjusting entry at December 31, 2018, to recognize bad debts expense.

(b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had an $800 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting entry for the current year's bad debts.