The Christy Corporation had the following balance sheet as of December 31, 20x2.The transactions for the first three months of 20x3 are also presented along with other information about specific accounts.

Christy Corporation

Balance Sheet

December 31, 20x2

ASSETS

LIABILITIES

Cash

$ 57,000

Accounts Payable

$ 34,000

Marketable Securities

8,000

Wages Payable

11,500

Accounts Receivable

73,000

Taxes Payable

8,000

Uncollectible Accounts

-2,000

Short-Term Note Payable

12,000

Inventory

84,000

Interest Payable

500

Supplies

9,000

Unearned Revenue

13,000

Prepaid Insurance

6,000

Total Current Assets

$235,000

Total Current Liabilities

$ 79,000

Land

$114,000

Long-Term NotesPayable

$ 20,000

Equipment

227,000

Bonds Payable

100,000

Accumulated Depreciation

-87,000

Mortgage Payable

320,000

Building

560,000

Total Long-TermLiabilities

$440,000

Accumulated Depreciation

-130,000

Intangible Assets

70,000

STOCKHOLDER EQUITY

Total Long-Term Assets

$754,000

Capital Stock

$100,000

Paid in Capital

250,000

Retained Earnings

120,000

Total Stockholders Equity

$470,000

Total Assets

$989,000

Total Liabilities & Equity

$989,000

AdditionalInformation

Accounts Receivable

The following table indicates the historical breakout of accounts receivable

Days

Current

30 to 60

60 to 90

Over 90

Percent of Balance

50%

30%

15%

5%

Percent Collectible

95%

90%

80%

60%

The company uses the gross method of recording all sales on accounts.

Marketable Securities

The interest rate earned on marketable securities is 6.0%.

Inventory

In 20x2, the company had used the gross method to record inventory purchases on account.As of January 1, 20x3, the company is using the net method to record inventory purchases on account.

Prepaid Insurance

A three-year insurance policy in the amount of $7,200 was purchased on July 1, 20x2.

Equipment

Equipment is depreciated at an average amount of $3,000 per month.

Building

The current building was purchased on January 1, ten years ago and has an expected 40-year life at which time its salvage value will be $40,000.

Intangible Assets

Intangible assets were initially valued at $80,000 and are being depreciated over 40 years at $2,000 per year.

Short-Term Notes Payable

The one-year short-term note payable is due on March 1, 20x3.The interest rate is 5.0% which is payable at maturity.

Long-Term Notes Payable

The long-term notes payable are due in ten years.The interest rate on the notes is 4.5%.

Bonds Payable

The bonds payable mature in twenty years.The interest rate on the bonds is 4.0%.

Mortgage Payable

The following amortization schedule can be used for the January, 20x3 mortgage payment on the 7.0%, 30- year mortgage.

Month

Payment

Interest

Principal

Balance

January

$3,500

$1,867

$1,633

$320,000

$318,367

Capital Stock

The capital stock is common stock at $10 par value with 50,000 shares authorized, and 10,000 shares issued and outstanding.

Journal Entries

(1)Jan1Equipment with a historical cost of $10,000 and an accumulated depreciation of $3,000 was sold for $6,000

(2)Jan2Equipment with a historical cost of $20,000 and an accumulated depreciation of $18,000 was disposed of with an additional disposal cost of $1,300.

(3)Jan2Christy Corporation borrowed $24,000 on a short-term 90 day, 3.0% note payable.

(4)Jan3Christy Corporation paid $18,000 in advance for the 6 month rental of a warehouse.

(5)Jan5Christy Corporation declared a dividend of $2.50 per share payable on February 10, 20x3 to all shareholders of record on January 20, 20x3.

(6)Jan6The amount in wages payable and taxes payable was paid in full.

(7)Jan8Christy Corporation paid a total of $18,000 on accounts payable and was able to take advantage of $1,500 in purchase discounts for early payment.The original inventory purchase was recorded at the full amount (gross method).

(8)Jan 15Cash sales for two weeks equaled $22,800.The cost of inventory sold equaled $12,600.

(9)Jan 20Supplies in the amount of $4,200 were purchased for cash.

(10) Jan 21A customer who owed $10,000 on an account receivable, agreed to sign a 60-day note receivable with an interest rate of 3.0%.The interest earned on the note will be paid at the maturity date of the note receivable.

(11) Jan 29The balance of $14,500 in accounts payable was paid.

(12) Jan 30The company purchased $45,000 of inventory on account with the terms 2/10, net 30.The company has decided to switch to the net method for all inventory purchases on account beginning in 20x3.

(13) Jan 31Cash sales for two weeks equaled $24,000.The cost of inventory sold equaled $13,000.

(14) Jan 31Sales on account for the month of January totaled $55,000 with the terms 2/10, net 30.The cost of inventory sold equaled $26,000.

(15) Jan 31 The unearned revenue represented the rental of special equipment that was used by another company on weekends.$4,000 of the revenue was earned in January.

(16) Jan 31Collected cash of $48,000 from the accounts receivable, plus there was a total sales discount of $1,000 for the payment of receivables within the ten day discount period.

(17) Jan 31Salary expenses in the amount of $14,000 and tax expenses in the amount of $8,000 were paid.

(18) Jan 31The utility bill of $2,500 was paid.

(19) Jan 31A bill in the amount of $3,600 for advertising expenses incurred during the month of January was received.

(20) Jan 31The monthly payment for January of the mortgage payable was made.

(21) Feb1The Christy Corporation made a new issue of 5,000 shares of common stock for cash.The market price of the stock was $40 per share.

(22) Feb2A petty cash fund in the amount of $500 was established.

(23) Feb3The Christy Corporation bought back 1,000 shares of its own common stock for $40 per share and reports the purchase as treasury stock.

(24) Feb8The purchase of inventory on account on Jan 30thwhich was reported at the net amount was paid in full.

(25) Feb 10The dividend declared on January 5^th was paid.

(26) Feb 15Cash sales for two weeks equaled $20,200.The cost of inventory sold equaled $11,000.

(27) Feb 20The company purchases $20,000 of inventory on account with the terms 2/10, net 30.The net method was used to record the purchase.

(28) Feb 27The company paid an advertising bill for $5,600 which included the February advertising expense of $2,000 plus the balance due from January.

(29) Feb 28Cash sales for two weeks equaled $25,000.The cost of inventory sold equaled $14,000.

(30) Feb 28The monthly payment for February of the mortgage payable was made.

(31) Feb 28The company collected cash of $59,000 from the accounts receivable, plus there was a total sales discount of $1,100 for the payment of receivables within the ten day discount period.

(32) Feb 28Salary expenses in the amount of $21,000 and tax expenses in the amount of $9,000 were paid.

(33) Feb 28The utility bill of $2,100 was paid.

(34) Feb 28Sales on account for the month of February totaled $60,000 with the terms 2/10, net 30.The cost of inventory sold equaled $30,000.

(35) Mar1The short-term note payable of $12,000 that was due on March 1stplus all appropriate interest was paid.

(36) Mar3The amount of the petty cash fund was increased by $200.

(37) Mar 10Supplies in the amount of $2,700 were purchased for cash.

(38) Mar 15Cash sales for two weeks equaled $26,000.The cost of inventory sold equaled $14,400.

(39) Mar 20Christy Corporation reissued 300 shares of its own treasury stock for $42 per share.

(40) Mar 21The note receivable from January 21sthad been paid in full plus interest.

(41) Mar 25The company purchased $50,000 of inventory on account using the net method with the terms 2/10, net 30.

(42) Mar 28The purchase of inventory on account on February 20thwas paid in full.

(43) Mar 29The petty cash fund had $150 in cash and receipts in total amounts for the following expense categories:entertainment$160, travel $170, postage $90, and supplies $115.The petty cash fund was replenished.

(44) Mar 30Cash sales for two weeks equaled $20,000.The cost of inventory sold equaled $11,000.

(45) Mar 30The unearned revenue represented the rental of special equipment that was used by another company on weekends.$9,000 of the revenue was earned in March.

(46) Mar 31Sales on account for the month of March totaled $67,000 with the terms 2/10, net 30.The cost of inventory sold equaled $36,000.

(47) Mar 31Salary expenses in the amount of $16,000 and tax expenses in the amount of $7,000 were paid.

(48) Mar 31Collected cash of $70,000 from the accounts receivable, plus there was a total sales discount of $1,200 for the payment of receivables within the ten day discount period.

(49) Mar 31A warehouse building was acquired for $250,000.Closing costs on the acquisition equaled $7,000, and there were costs of $10,300 to get the building into an operational condition to be used by Christy Corporation.Christy Corporation paid $100,000 in cash as a down payment with the balance due being added to the mortgage payable account.

(50) Mar 31The utility bill of $3,000 was paid.

(51) Mar 31Christy Corporation repaid the 90 day note payable from January 2ndin full plus interest.

(52) Mar 31The equipment depreciation entry for the three months of 20x3 was completed.

(53) Mar 31The depreciation entry for the building for the months of January, February, and March was entered.

(54) Mar 31The amortization of intangible assets for the three months of 20x3 was completed.

(55) Mar 31The debt expense based on 1.0% of credit sales for the quarter was recorded.

(56) Mar 31Salary expenses incurred during the month of March but not yet paid equaled $8,400

(57) Mar 31 Tax expenses incurred during the month of March but not yet paid equaled $2,800.

(58) Mar 31A physical inventory of supplies indicated a total amount of $5,000 of supplies still on hand.A journal entry was completed for the supplies used during the quarter.

(59) Mar 31A customer sent an advance payment of $10,000 for the use of special equipment in April and May.

(60) Mar 31The amount of rent expense for the warehouse for the first three months of 20x3 was recognized.

(61) Mar 31Christy Corporation provided services to a customer in the amount of $3,000 during March but a bill has not been sent.

(62) Mar 31The amount of insurance expense for the first three months of 20x3 was recognized.

(63) Mar 31The amount of interest earned on marketable securities for the three months of 20x3 was recognized.

(64) Mar 31The amount of interest expense for the total long-term notes payable for the first three months of 20x3 was recognized.

(65) Mar 31The amount of interest expense for the bonds payable for the three months of 20x3 was recognized.

(66) Mar 31The monthly payment for March of the mortgage payable was made.

Required

1.Develop a single income statement representing January through March in good form for Christy Corporation for the first three months of 20x3.Ignore Federal Income Tax.