Prepare journal entries for the 5-10 items

Kelly Ltd that sells toys extracted the following unadjusted trial balance from its books for the financial year ending on 31 December 2020. Account title Accounts payable Accounts receivable Allowance for doubtful accounts (1 January 2020) Equipment Accumulated depreciation - equipment (1 January 2020) Delivery trucks Accumulated depreciation - delivery trucks (1 January 2020) Common stock (620,000 shares at $1 par value each) Additional paid-in capital Cash at bank Inventories (1 January 2020) Bank loan (required to make a $20,000 repayment by the year ended 31 December 2021) Retained earnings (1 January 2020) Rent expense Revenues (all revenues are on credit) Purchases Wages expense Insurance expense Total Debit Credit $ $ 234,000 362,000 4,000 300,000 80,000 500,000 200,000 620,000 400,000 9,457,500 720,000 74,000 8,000,000 36,000 2,310,000 210,000 327,000 1,500 11.918.000 11,918,000 5 6 7 Kelly Ltd is in a lawsuit as a customer alleged that the toys sold by Kelly Ltd caused harms to his children. The legal department of Kelly Ltd advised that the probability that Kelly Ltd will lose lawsuit is 80 percent. The loss of $400,000 can be reasonably estimated. The result of the lawsuit will be known on 1 June 2021. No record had been made. Kelly Ltd uses the aging of accounts receivable method to estimate the uncollectible amount. Kelly Ltd determined that accounts receivable of $20,000 were uncollectible. 2 percent of estimated percentage uncollectible applies to $100,000 of accounts receivable. 5 percent of estimated percentage uncollectible applies to the remaining balance of accounts receivable. No record had been made. Kelly Ltd purchased a new delivery truck on 1 March 2020. Kelly Ltd paid $40,000 for the purchase price, $2,000 for insurance and $5,000 for the service to clean the delivery truck. It is a legal requirement that delivery truck must be insured so that the truck can be driven on a road. The cleaning service provided the basic cleaning of the truck. The delivery truck was put in use on 1 October 2020. No record had been made. The new truck is depreciated on a straight-line basis with an estimated useful life of 10 years and $5,000 residual value. No record had been made. Other delivery trucks already recorded on trial balance are depreciated on a straight-line basis with an estimated useful life of 10 years and $10,000 residual value. No record had been made. Equipment is depreciated on a double declining balance basis with an estimated useful life of 10 years and $20,000 residual value. No record had been made. 8 9 10