Presented below are the financial statements of Splish Brothers Company. 2016 Splish Brothers Company Comparative Balance Sheets December 31 Assets 2017 Cash $ 75,950 Accounts receivable 43,400 Inventory 60,760 Property, plant, and equipment 130,200 Accumulated depreciation (69,440 ) Total $240,870 $ 43,400 30,380 43,400 169,260 (52,080 ) $234,360 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total $ 41,230 15,190 36,890 39,060 108,500 $240,870 $ 32,550 17,360 71,610 30,380 82,460 $234,360 13,500 923,500 0 0 0 631,500 0 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 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. Salaries and wages of $6,370 were paid. 15 23 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. Retained Earnings Statement $ vi >