PREPARE INCOME STATEMENT ON EXCEL

The following transactions occurred during December.

Dec. 2 Paulson purchased equipment for $16,000, plus sales taxes of $800 (all

paid in cash).

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.

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

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

Paulson Corporation's unadjusted trial balance at December 1, 2012, is presented