state unemployment tax (assume 5.4 percent un Analyze: By what amount were the assets of the business ht were the assets of the business affected by adjustments? Recording adjustments and comp g adjustments and completing the worksheet. Healthy Eating Foods Company is a distributor of nutrit Foods Company is a distributor of nutritious snack foods such as granola bars. On December 31, 2016, the firm's general ledger conta To, the firm's general ledger contained the accounts and balances that follow. INSTRUCTIONS repare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2016. 2. Enter the adjustments in the Adjustments section of the worksheet. Identify each adjustment with the appropriate letter. 3. Complete the worksheet. blem Note: This problem will be required to complete Problem 13.4A in Chapter 13. ACCOUNTS AND BALANCES Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Supplies Prepaid Insurance Office Equipment Accum. Depreciation - Office Equipment Warehouse Equipment Accum. Depreciation - Warehouse Equipment Notes Payable Bank Accounts Payable Interest Payable Social Security Tax Payable Medicare Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Salaries Payable Phillip Tucker, Capital $ 30,100 Dr. 35,200 Dr. 420 Cr. 86,000 Dr. 10,400 Dr. 5,400 Dr. 8,300 Dr. 2,650 (r. 28,000 Dr. 9,600 Cr. 32,000 Cr. 12,200 Cr. 1,680 388 Cr. Cr. 108,684 Cr. 56,000 653,778 10,000 350,000 9,200 DE 6 Dr. Dr. CM ACCOUNTS AND BALANCES (CONT.) Phillip Tucker, Drawing Sales Sales Returns and Allowances Purchases Purchoses Returns and Allowances Income Summary Rent Expense Telephone Expense Salaries Expense Payroll Taxes Expense Supplies Expense Insurance Expense Depreciation Expense - Office Equip. Depreciation Expense - Warehouse Equip. Uncollectible Accounts Expense Interest Expense 36,000 2,200 160,000 13,000 Dr. Dr. Dr. Dr. ADJUSTMENTS a.-b. Merchandise inventory on December 31, 2016, is $78,000. c. During 2016, the firm had net credit sales of $560,000; past experience indicates that 0.5 percent of these sales should result in uncollectible accounts. d. On December 31, 2016, an inventory of supplies showed that items costing $1,180 were on hand. e. On May 1, 2016, the firm purchased a one-year insurance policy for $5,400. f. On January 2, 2014, the firm purchased office equipment for $8.300. At that time, the equipment was estimated to have a useful life of six years and a salvage value of $350. g. On January 2, 2014, the firm purchased warehouse equipment for $28,000. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $4.000. h. On November 1, 2016, the firm issued a four-month, 12 percent note for $32,000. i. On December 31, 2016, the firm owed salaries of $5,000 that will not be paid until 2017. j. On December 31, 2016, the firm owed the employer's social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $5,000 of accrued wages. k. On December 31, 2016, the firm owed the federal unemployment tax (assume 0.6 percent) and the state unemployment tax (assume 5.4 percent) on the entire $5,000 of accrued wages. Analyze: When the financial statements for Healthy Eating Foods Company are prepared, what net income will be reported for the period ended December 31, 2016? Recordini