On December 1, 2014, Havenhill Company had the following account balances. Debits Credits Cash $19,020 Notes Receivable 2,080 Accumulated DepreciationEquipment $3,240 Accounts Receivable 7,750 Accounts Payable 6,260 Inventory 15,810 Common Stock 48,000 Prepaid Insurance 1,900 Retained Earnings 18,860 Equipment 29,800 $76,360 $76,360 During December, the company completed the following transactions. Dec. 7 Received $3,680 cash from customers in payment of account (no discount allowed). 12 Purchased merchandise on account from Brown Co. $12,200, terms 1/10, n/30. 17 Sold merchandise on account $16,400, terms 2/10, n/30. The cost of the merchandise sold was $10,290. 19 Paid salaries $1,740. 22 Paid Brown Co. in full, less discount. 26 Received collections in full, less discounts, from customers billed on December 17. 31 Received $2,738 cash from customers in payment of account (no discount allowed).

Journalize the December transactions. (Assume a perpetual inventory system.)

Enter the December 1 balances in the ledger T accounts and post the December transactions.

Please note: 1) you may insert as many rows as needed if the space between accounts is not enough; 2) fill out the T-accounts as needed, you don't have to use all of the accounts provided as follows.

The statement from Jackson County Bank on December 31 showed a balance of $27,500. A comparison of the bank statement with the Cash account revealed the following facts.

1

The bank collected a note receivable of $2,080 for Havenhill Company on December 15.

2

The December 31 receipts were deposited in a night deposit vault on December 31. These deposits were recorded by the bank in January.

3

Checks outstanding on December 31 totaled $1,251.

4

On December 31, the bank statement showed a NSF charge of $785 for a check received by the company from L. Menke, a customer, on account.

Prepare a bank reconciliation as of December 31 based on the available information.

Adjustment data:

1

Depreciation $183 per month.

2

Insurance expired $475.

3

Income tax expense was $348. It was unpaid at December 31.

Journalize the adjusting entries resulting from the bank reconciliation and adjustment data.

Post the adjusting entries from (d) to the ledger T-accounts.

Please note: 1) you may insert as many rows as needed if the space between accounts is not enough; 2) fill out the T-accounts as needed, you don't have to use all of the accounts provided as follows.

(This is the same T-accounts from part (b), so please make sure you carry over the number from the T-accounts you prepare in (b)) Prepare an adjusted trial balance. Prepare a multi-step income statement for December 31.