On January 1, 2021, the general ledger of Parts Unlimited included the following account balances: Account Title Credits Debits Cash $162,400 Accounts receivable 12,400 Inventory 37,800 Land 340,000 Equipment 347,500 Accumulated depreciation $172,000 Accounts payable 14,800 Common stock 520,000 Retained earnings 193,300 Totals $900,100 $900,100 From January 1 to December 31, the following summary transactions occurred: a. b. C. Purchased inventory on account, $325,800. Sold inventory on account, $567,200. The inventory cost $342,600. Received cash from customers on account, $558,700. d. Paid cash on account, $328,500. e. Paid cash for salaries, $94,700, and for utilities, $52,700. 2 Assets In addition, Parts Unlimited had the following transactions during the year: April 1 June 30 October 1 November 15 Purchased equipment for $95,000 using a note payable, due in 12 months plus 8% interest. The company also paid cash of $3,200 for freight and $3,800 for installation and testing of the equipment. The equipment has an estimated residual value of $10,000 and a ten-year service life. Purchased a patent for $40,000 from a third-party marketing company related to the packaging of the company's products. The patent has a 20-year useful life, after which it is expected to have no value. Sold equipment for $30,200. The equipment cost $60,700 and had accumulated depreciation of $37,400 at the beginning of the year. Additional depreciation for 2021 up to the point of the sale is $8,500. Several older pieces of equipment were improved by replacing major components at a cost of $54,100. These improvements are expected to enhance the equipment's operating capabilities. [Record this transaction using Alternative 2-capitalization of new cost.] same industry? b. Suppose the equipment purchased on April 1, 2021, had been depreciated using the units of production method. At the time of purchase, expected output was 20,000 units, and actual production for 2021 was 2,000 units. Calculate the amount of depreciation expense that would have been recorded and determine the difference in net income and total assets for 2021 (ignoring tax effects). Adjusted Sales revenue Cost of goods sold Gross profit Operating expenses: Parts Unlimited Income Statement For the year ended December 31, 2021 Salaries expense 94.700 Utilities expense 52,700 Depreciation expense 36.900 Amortization expense 1,000 Loss on impairment 14,300 Total operating expenses Net Profit Gain on sale of equipment Operating income Interest expense Income before taxes Income tax expense Net income mplete the company's Unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. Adjusted Parts Unlimited Balance Sheet December 31, 2021 Assets Liabilities Cash 174,300 Accounts payable 12,100 Accounts receivable 20.900 Notes payable 95,000 Inventory 21,000 Interest payable 5,700 0 Income taxes payable 12,600 0 0 Total current assets 216,200 Total liabilities 125,400 Noncurrent assets: Stockholders' equity Land Equipment Accumulated depreciation Patent 340,000 Common stock 520,000 388,300 Retained earnings 215,400 (122 700) 0 39.000 0 0 Total stockholders' equity 735,400 Total assets 1$ 860,800 Total liabilities and stockholders equity $ 860,800 ing sales with its fixed assets. True (b) Suppose the equipment purchased on April 1, 2021, had been depreciated using the units of production method. At the time of purchase, expected output was 20,000 units, and actual production for 2021 was 2,000 units. Calculate the amount of depreciation expense that would have been recorded and determine the difference in net income and total assets for 2021 (ignoring tax effects). Units-of-production depreciation: Depreciation expense under units-of-production method is higher. (True or False) Income and total assets in 2021 would have been (c) The transaction on June 30, 2021, shows the .com $ 9,200 True lower by $ 1,020