Question 1 of 1

Question 1 of 1 View Policies Current Attempt in Progress Windsor's balance sheet at December 31, 2021, is presented below. Windsor Balance Sheet December 31, 2021 - / 100 Cash Inventory Prepaid insurance Equipment $90,000 92,250 16,800 114,000 $313,050 Accounts payable Interest payable Bonds payable Common stock Retained earnings $41,250 7,soo 150,000 75,000 $39,300 $313,050 During 2022, the following transactions occurred. Windsor uses a perpetual inventory system. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Windsor paid $7,500 interest on the bonds on January 1, 2022. Windsor purchased $723,300 of inventory on account. Windsor sold for $1,440,000 cash inventory which cost $792,000. Windsor also collected $86,400 sales taxes. Windsor paid $690,000 on accounts payable. Windsor paid $7,500 interest on the bonds on July 1, 2022. The prepaid insurance ($16,800) expired on July 31. On August 1, Windsor paid $30,600 for insurance coverage from August 1, 2022, through July 31, 2023. Windsor paid SSI,OOO sales taxes to the state. Paid other operating expenses, $273,000. Redeemed the bonds on December 31, 2022, by paying $144,000 plus $7,500 interest. Issued $270,000 of 8% bonds on December 31, 2022, at 103. The bonds pay interest every June 30 and December 31. Adjustment data: 2. 3. Recorded the insurance expired from item 7. The equipment was acquired on December 31, 2021, and will be depreciated on a straight-line basis over S years with a $9,120 salvage value. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.)