Paulson Corporations unadjusted trial balance at December 1,2012, is presented

Cash	Debt	Credit
Accounts receivable	$22,000.00
Notes receivable	$36,800.00
Interest receivable	$10,000.00
Inventory	$-
Prepaid Insurance	$36,200.00
Land	$3,600.00
Buildings	$20,000.00
Equipment	$150,000.00
Patent	$9,000.00
Allowance for doubtful accounts		$500.00
Accumulated depreciation-buildings		$50,000.00
Accumulated depreciation-Equipment		$24,000.00
Accounts payable		$27,300.00
Salaries and wages payable		$-
Notes payable (due April 20,2012)		$11,000.00
Interest payable		$-
Notes Payable (due in 2018)		$35,000.00
Common stock		$50,000.00
Retained earnings		$63,600.00
Dividends	$12,000.00
Sales revenue		$900,000.00
Interest revenue		$-
Gain on disposal of plant assets		$-
Bad debts expense	$-
Cost of goods sold	$630,000.00
Depreciation expense	$-
Insurance expense	$-
Interest expense	$-
Other operating expenses	$61,800.00
Amortization expense	$-
Salaries and wages expense	$110,000.00
Total	$1,161,400.00	$1,161,400.00

The following transactions occurred during December

-Dec. 2 Paulson purchased equipment for 16,000, plus sales taxes of 800 ( all paid in cash)

-Dec. 2 Paulson sold for 3,500 equipment, which originally cost 5,000. Accumulated depreciation on this equipment at January 1, 2012, was 1,800; 2012 depreciation prior to the sale of equipment was 450

-Dec. 15 Paulson sold for 5,000 on account inventory that cost 3,500

-Dec. 23 Salaries and wages of 6,600 were paid

Adjustment Data:

1.) Paulson estimates that uncollectible accounts receivable at year-end are 4,000.

2.) The note receivable is a one-year, 8% note dated April 1, 2012. No interest has been recorded

3.) The balance in prepaid insurance represents payment of a 3,600, 6-month premium on September 1, 2012

4.) The building is being depreciated using the straight-line method over 30 years. The salvage value is 30,000

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

6.) The equipment purchased on December 2, 2012, is being depreciated using the straight-line method over 5 years, with a salvage value of 1,800

7.) The patent was acquired on January 1, 2012, and has a useful life of 9 years from that date.

8.) Unpaid salaries at December 31, 2012 total 2,200

9.) Both the short-term and long-term notes payable are dated January 1, 2012, and carry a 10% interest rate. All interest is payable in the next 12 months.

10.) Income tax expense was 15,000. It was unpaid at December 31.