Pina Colada Corp.'s unadjusted trial balance at December 1, 2017, is presented below. Debit Credit Cash $25,900 35,100 Accounts Receivable 8,400 0 36,280 3,600 21,800 140,100 60,500 9,630 Notes Receivable Interest Receivable Inventory Prepaid Insurance Land Buildings Equipment Patent Allowance for Doubtful Accounts Accumulated Depreciation-Buildings Accumulated Depreciation-Equipment Accounts Payable Salaries and Wages Payable Notes Payable (due April 30, 2018) Income Taxes Payable Interest Payable Notes Payable (due in 2023) Common Stock $600 46,700 24,200 28,100 0 12,900 0 0 36,000 56,400 24,410 13,500 923,500 0 0 0 631,500 Retained Earnings Dividends Sales Revenue Interest Revenue Gain on Disposal of Plant Assets Bad Debt Expense Cost of Goods Sold Depreciation Expense Income Tax Expense Insurance Expense Interest Expense Other Operating Expenses Amortization Expense Salaries and Wages Expense Total 0 0 0 0 61,000 0 105,500 $1,152,810 $1,152,810 The following transactions occurred during December. Purchased equipment for $16,200, plus sales taxes of $1,800 (paid in cash). Dec. 2 2 Pina sold for $3,550 equipment which originally cost $4,800. Accumulated depreciation on this equipment at January 1, 2017, was $1,850; 2017 depreciation prior to the sale of equipment was $480. Pina sold for $5,450 on account inventory that cost $3,280. 15 23 Salaries and wages of $6,370 were paid. Adjustment data: 1. 2. 3. 4. 5. 6. Pina estimates that uncollectible accounts receivable at year-end are $4,190. The note receivable is a one-year, 8% note dated April 1, 2017. No interest has been recorded. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1, 2017. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,600. 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. The equipment purchased on December 2, 2017, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,340. The patent was acquired on January 1, 2017, and has a useful life of 9 years from that date. Unpaid salaries at December 31, 2017, total $2,070. Both the short-term and long-term notes payable are dated January 1, 2017, and carry a 10% interest rate. All interest is payable in the next 12 months. Income tax expense was $12,000. It was unpaid at December 31. 7. 8. 9. 10 PINA COLADA CORP. Balance Sheet December 31, 2017 Assets Current Assets Cash Accounts Receivable $ Less : Allowance for Doubtful Accounts Notes Receivable Interest Receivable Inventory Prepaid Insurance Total Current Assets Property, Plant and Equipment Land Buildings $ Less Accumulated Depreciation-Buildings Equipment Less Accumulated Depreciation-Equipment Total Property, Plant and Equipment Intangible Assets Patents Total Assets Liabilities and Stockholders' Equity Current Liabilities > Accounts Payable $ Interest Payable Salaries and Wages Payable Income Taxes Payable Notes Payable Total Current Liabilities Long-term Liabilities Notes Payable Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Liabilities and Stockholders' Equity