The following account balances have been taken from the ledger of Scorpio, Inc. for the quarter ended December 31, 2018. Hugh Jize is the CEO and President of the company. Scorpio is in the business of buying and selling sunglasses and prepares its financial statements on a quarterly basis. At the beginning of October of 2018, the company had the following balances in its accounts:

Accounts Payable

79,945

Accounts Receivable

20,680

Accumulated Depreciation - Buildings

31,300

Accumulated Depreciation - Equipment

37,535

Buildings

325,200

Cash

21,850

Common Stock

250,000

Equipment

167,900

Inventory

38,920

Notes Payable

150,000

Patents (net of amortization)

48,000

Retained Earnings

76,920

Supplies

3,150

During the last quarter of 2018, Scorpio experienced the following events:

1) Purchased inventory on account for $104,045.

2) Sold inventory on account for $184,620. This inventory cost the company $101,285. Scorpio

uses the perpetual method for recording the purchase and sale of inventory.

3) Collected $180,920 of cash from customers on account.

4) Paid $138,815 for the purchases on account (reduce Accounts Payable).

5) Purchased and paid for $4,685 of supplies. Used $5,235 of supplies during the quarter.

6) Paid $22,100 to the bank, consisting of $20,000 of principal on the Note Payable and $2,100 of interest on the Note Payable.

7) Paid cash for the following expenses for the quarter; $24,620 for wages to its employees, $4,200 for rent, $2,865 for insurance, and $8,425 for advertising.

8) Sold a piece of equipment for $5,800 cash. This equipment originally cost the company $9,200. Scorpio had recorded $7,000 of depreciation on this asset since its purchase.

9) Purchased a new piece of equipment for $12,400 and paid cash.

10) Issued new shares of stock to shareholders for $50,000.

11) Paid $20,000 of dividends to the owners of the corporation.

Use the following information to compute the amount of amortization expense on the patent and the amount of depreciation expense on the buildings and equipment for the quarter. Scorpio uses the straight- line method to compute depreciation.

The patent was acquired on October 1, 2017 for $57,600. The patent has a useful life of 6 years. The company does not use an "Accumulated Amortization" account.

Scorpio owns only one building which was purchased on April 1, 2016 for $325,200. The expected useful life of the building is 10 years and the estimated salvage value at the end of those 10 years is $200,000.

At the beginning of the quarter, Scorpio owned 3 different pieces of equipment. The first piece of equipment was purchased on April 1, 2016 for $9,200. This equipment had an estimated useful life of 3 years and an estimated salvage value of $800. This is the equipment that was sold as described in transaction #8 above. You don't need to compute depreciation for this equipment for the current quarter since it was sold at the beginning of the quarter.

The company also owned a piece of equipment it purchased on October 1, 2017 for $124,800. This equipment has an estimated useful life of 4 years and an estimated salvage value of $20,000.

The third piece of equipment was purchased on January 1, 2018 for $33,900. It has an estimated useful life of 5 years and an estimated salvage value of $5,000.

The company also purchased a new piece of equipment on October 1, 2018 for $12,400 as described in transaction #9 above. This equipment has an estimated useful life of 4 years and an estimated salvage value of $3,200.

Required:Use the preceding information to record the transactions and adjusting entries for the quarter, including the amortization and depreciation you compute. Then, Create in good form amulti-stepincome statement, a statement of changes in stockholders' equity, and a balance sheet for the company for the quarter ended December 31, 2018.