Problem 22B-7 You have been assigned to examine the financial statements of Stellar Company for the year ended December 31, 2017. You discover the following situations 1. Depreciation of $3,000 for 2017 on delivery vehicles was not recorded. 2. The physical inventory count on December 31, 2016, improperly excluded merchandise costing $17,700 that had been temporarily stored in a public 3. A collection of $5,100 on account from a customer received on December 31, 2017, was not recorded until January 2, 2018 4. In 2017, the company sold for $3,700 fully depreciated equipment that originally cost $24,400. The company credited the proceeds from the sale to the 5. During November 2017, a competitor company filed a patent-infringement suit against Stellar claiming damages of $220,900. The company's legal counsel warehouse. Stellar uses a periodic inventory system. Equipment account. has indicated that an unfavorable verdict is probable and a reasonable estimate of the court's award to the competitor is $135,000. The company has not reflected or disclosed this situation in the financial statements 6. Stellar has a portfolio of trading investments. No entry has been made to adjust to market. Information on cost and fair value is as follows Cost Fair Value December 31, 2016 December 31, 2017 $88,300 $90,200 $88,300 $88,200 7. At December 31, 2017, an analysis of payroll information shows accrued salaries of $11,200. The Salaries and Wages Payable account had a balance of $14,900 at December 31, 2017, which was unchanged from its balance at December 31, 2016 A large piece of equipment was purchased on January 3, 2017, for $42,000 and was charged to Maintenance and Repairs Expense. The equipment is estimated to have a service life of 8 years and no residual value. Stellar normally uses the straight-line depreciation method for this type of equipment. A $11,400 insurance premium paid on July 1, 2016, for a policy that expires on June 30, 2019, was charged to insurance expense. 8. 9