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College Coasters is a San Diegobased merchandiser specializing in logo-adorned drink coasters. The company reported the following balances in its unadjusted trial balance at December 1.
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College Coasters is a San Diego-based merchandiser specializing in logo-adorned drink coasters. The company reported the following balances in its unadjusted trial balance at December 1 Cash Accounta Receivable Inventory Prepaid Rent Equipment Accunulated Depreciation 8,500 1,800 450 540 730 110 1,260 300 salaries and wagea Fayable Incone Taxes Payable Common Stock Retained Earnings Sales Revenue Cost of Goods Sold Rent Expense Salaries and Wages Exxpense Depreciation Exponse Income Tax Expense office Expensers 6,200 3,000 23,690 8,630 990 1,600 110 1,200 The company buys coasters from one supplier. All amounts in Accounts Payable on December 1 are owed to that supplier. The inventory on December 1 consisted of 900 coasters, all of which were purchased in a batch on July 10 at a unit cost of $0.50. College Coasters records its inventory using perpetual inventory accounts and the FIFO cost flow method During December, the company entered into the following transactions. Some of these transactions are explained in greater detail below a Purchased 500 coasters on account from the regular supplier on 12/1 at a unit cost of $0.52, with terms of n/60 b. Purchased 900 coasters on account from the regular supplier on 12/2 at a unit cost of S0.55, with terms of n/60 c Sold 1700 coasters on account on 12/3 at a unit price of $110 d. Collected $940 from customers on account on 12/4 e. Paid the supplier $1,280 cash on account on 12/18. t Paid employees $490 on 12/23, of which $300 related to work done in November and $240 was for wages up to December 22 Loaded 90 coasters on a cargo ship on 12/31 to be delivered the following week to a customer in Kona, Hawai. The sale was made FOB destination with terms of n/60. Other relevant information includes the following at 12/31 h College Coasters has not yet recorded $180 of office expenses incurred in December on account. L The company estimates that the equipment depreciates at a rate of $9 per month. One month of depreciation needs to be recorded . Wages for the period from December 23-31 are $100 and will be paid on January 15. k The $540 of Prepaid Rent relates to a six-month period ending on May 31 of next year l The compenv incurred $700 of income tax but has made no tax pavments this vear