Sol-Electronics Company starts from December 1, 2020. The companys accounting year end is December 31.

2020

1. On Dec. 1, two shareholders contributed $40,000 to the company in exchange for ordinary shares
2. On Dec. 1, Company purchased an automobile for $40,000 by writing a note payable to the bank. The note is due on Nov. 1 2021 with an annual interest rate of 6%. The truck has a useful life of 5 years and residual value is estimated to be $10,000. The company is using straight line depreciation method.
3. On Dec. 1, Company hired an employee at monthly wage of $3,000. The wage is payable on the fifth day after the end of the month.
4. On Dec 5, Company purchased 50 laptops for sale to customers at $500 each from Dell on credit. The payment is due in 60 days.
5. On Dec 10, Company sold 30 laptops to WS University at $800 per unit. The payment term is 2/10, n/30.
6. On Dec 10, Company sold 10 laptops to Daejeon Electronics at $800 per unit. The payment term is 2/10, n/30.
7. On Dec 10, Company purchased 50 laptops for sale to customers at $550 each. The payment is due in 60 days.
8. On Dec. 15, WS University returned 5 laptops.
9. On Dec. 20, WS University paid the remaining balance.
10. On Dec. 25, Company sold 40 laptops to CN University at $900 per unit. The payment term is 2/10, n/30. Company uses first-in first-out (FIFO) method for inventory accounting.
11. On Dec 31, Company chose allowance method for uncollectible accounts receivable. It is estimated that 10% of accounts receivable on December 31 will be uncollectible.

2021

12. On Jan. 5, Dec 2020 wage was paid to the employee
13. On Jan. 10, Dec 2020 rent $ 2,000 and utilities $400 were paid

(Problem 1): Please prepare journal entries for the transactions (if necessary) in December 2020 and all necessary adjusting journal entries to prepare 2020 financial statements.

Please refer to transaction 12 and 13 that occurred in 2021

(Problem 2). Please determine the following amount:

1. 2020 net income (please prepare a simple income statement)
2. Inventory reported on the balance sheet on December 31, 2020

(Problem 3):

On Feb 15, 2021 Daejeon Electronics filed bankruptcy and it is determined that the remaining uncollected accounts receivable needs to be written off.

On March 31, 2021, Company sold the automobile for $22,000 cash.

Please prepare journal entries for above transactions occurred in 2021.