Mitchell Companys trial balance at November 30th, 2016, is presented below. All 2016 transactions have been recorded except for the items described below as unrecorded transactions.

Unrecorded transactions:

1. On May 1, 2016, Mitchell made a cash purchase of equipment for $13,200 plus sales taxes of $600.

2. On July 1, 2016, Mitchell sold for $3,500 cash equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2016, was $1,800. This equipment had been depreciated using the straight-line method assuming a residual value of $500 and a useful life of 5 years.

3. December transactions:

a. Dec 8, received $18,700 from customers in payment on their accounts (no discount is applicable).

b. Dec 10, sold merchandise for cash $9,450. The cost of the merchandise sold is $5,670.

c. Dec 14, purchased merchandise on account from Elizabeth Company, $16,000, terms 2/10,n/30.

d. Dec 15, purchased supplies for cash $500.

e. Dec 16, returned merchandise to Elizabeth Company, $1,000.

f. Dec 17, sold merchandise on account to Perry Company $13,400, terms 3/15, n/30. The cost of the merchandise was $8,040.

g. Dec 19, Paid $9,000 for wages due employees.

h. Dec 22, paid Elizabeth Company.

i. Dec 23, wrote off an uncollectible account in the amount of $600.

j. Dec 29, received payment from Perry Company.

4. Mitchell aged its accounts receivable and estimated that uncollectible accounts will be $4,000.

5. The note receivable is a one-year, 8% note dated April 1, 2016. No interest accrual has been recorded.

6. The balance in prepaid insurance represents payment of a $3,600, 6-month premium paid on September 1, 2016.

7. The building is being depreciated using the straight-line method over 30 years. The residual value is $30,000.

8. The equipment owned prior to this year (2016) is being depreciated using the straight-line method over 5 years and the residual value is 10% of cost.

9. The equipment purchased on May 1, 2016, is being depreciated using the straight-line method over 5 years with a residual value of $0.

10. Unpaid salaries and wages at December 31, 2016, total $4,000.

11. The unearned rent revenue of $6,000 was received on December 1, 2016, for 3 months rent. Mitchell began renting an unused portion of their building to a tenant on that date.

12. Both the current and long-term notes payable are dated March 1, 2016, and carry a 6% interest rate. No interest accrual has been recorded.

REQUIRED:

a. Prepare journal entries for the unrecorded transactions listed above,

b. Post the entries to T-accounts. The following accounts might also be used when journalizing and posting the above transactions: interest receivable, interest expense, interest payable, interest revenue, salaries & wages payable, rent revenue, gain on disposal of plant asset, loss on disposal of plant asset, bad debt expense, depreciation expense, insurance expense, rent expense, and supplies.

c. Prepare a December 31, 2016, trial balance.

d. Prepare the necessary closing journal entries.

e. Prepare a multiple-step income statement for 2016.

f. Prepare a stockholders equity statement for 2016.

g. Prepare a December 31, 2016, classified balance sheet.

Accounts Receivable Notes Receivable (due in 2017 Inventory Prepaid Insurance Buildings Accumulated Depreciation, Building Equipment Accumulated Depreciation, Equipment Accounts Payable Rent Revenue Notes Payable (due in 2017) Notes Payable (due in 2029) Common Stock, no par Retained Earnings Dividends Sales Revenue Salaries and Wages Expense General Expenses Total Debit 30800 10,000 20,000 15o,000 60,000 24,000 6,000 11000 35,000 50,000 21.000 900,000 630,000 110,000 1167400 1167400