1. November 19th, customers bought 8,650 garden gnomes at $148 per unit. The cost of goods sold is determined by the method of inventory valuation used by the company. Customers paid 45% in cash and the remainder was on account.

2. On December 31st, the company declared dividends of $0.22 per share to be paid at a later date.

3. Since its inception, the company has been able to collect 88% of its ending accounts receivable balance from customers that bought its product on account. Based on this information, adjust the allowance for bad debt account. NOTE: Use the 2022 ending accounts receivable balance to make this calculation.

Journal Entry

\begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ BALANCE SHEET } \\ \hline December 31, & & 2021 & & 2020 \\ \hline \multicolumn{5}{|l|}{ Assets } \\ \hline Cach & $ & 612,410 & $ & 658,079 \\ \hline Marketable securities & & 75,000 & & 30,000 \\ \hline Accounts receivable & & 455,DOD & & 531,000 \\ \hline Allowance for Bad Debt & & {[125,000]} & & {[105,000]} \\ \hline Prepaid Advertising & & - & & - \\ \hline Prepaid Insurance & & 139,836 & & 149,519 \\ \hline Prepaid Rent & & 30,500 & & 34,982 \\ \hline Offlce supplies & & 3,520 & & 5,400 \\ \hline Inventory & & 975,000 & & 775,000 \\ \hline Current Assets & & 2,166,266 & & 2,078,980 \\ \hline Office Equipment & & " & & - \\ \hline Equipment & & 5,000,000 & & 5,000,000 \\ \hline Accumulated depreciation & & {[2,000,000]} & & (1,500,000) \\ \hline Long-term notes receivable & & 285,000 & & - \\ \hline Land & & 1,450,000 & & 1,450,000 \\ \hline Patent & & & & \\ \hline Non-current Assets & & 4,735,000 & & 4,950,000 \\ \hline Total Assets & $ & 6,901,266 & $ & 7,028,980 \\ \hline \multicolumn{5}{|l|}{ Liabilities } \\ \hline Accounts paryable & $ & 450,000 & $ & 570,000 \\ \hline Wages payable & & 32,500 & & 33,000 \\ \hline Interest Payable & & - & & - \\ \hline Short-term Note Paysble & & - & & - \\ \hline Deferred Revenue & & - & & - \\ \hline Dividends payable & & 155,000 & & 135,000 \\ \hline Current Liabilities & & 637,500 & & 738,000 \\ \hline Long-term notes payable & & 1,250,000 & & 1,250,000 \\ \hline Total Liabilities & & 1,897,500 & & 1,988,000 \\ \hline \multicolumn{5}{|l|}{ Steckholders' Equity } \\ \hline Common Stock & & 1,400,000 & & 1,400,000 \\ \hline Additional Paid-in-Capital & & 1,824,406 & & 1,824,406 \\ \hline Treasury Stock & & - & & - \\ \hline Retained earnings & & 1,789,360 & & 1,816,574 \\ \hline Total Stockholders' Equity & & 5,013,766 & & 5,040,980 \\ \hline Total Liabilities and Stockholders' Equity & $ & 6,901,266 & $ & 7,028,980 \\ \hline \end{tabular}