The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Mar.	1	Purchased merchandise on account from Kirkwood Co., $215,000, terms n/30.
	31	Issued a 30-day, 6% note for $215,000 to Kirkwood Co., on account.
Apr.	30	Paid Kirkwood Co. the amount owed on the note of March 31.
Jun.	1	Borrowed $400,000 from Triple Creek Bank, issuing a 45-day, 8% note.
Jul.	1	Purchased tools by issuing a $60,000, 60-day note to Poulin Co., which discounted the note at the rate of 6%.
	16	Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 9% note
		for $400,000. (Journalize both the debit and credit to the notes payable account.)
Aug.	15	Paid Triple Creek Bank the amount due on the note of July 16.
	30	Paid Poulin Co. the amount due on the note of July 1.
Dec.	1	Purchased equipment from Greenwood Co. for $360,000, paying $160,000 cash and issuing a series of ten 6% notes
		for $20,000 each, coming due at 30-day intervals.
	22	Settled a product liability lawsuit with a customer for $50,000, payable in January. Accrued the loss in a litigation claims payable account.
	31	Paid the amount due to Greenwood Co. on the first note in the series issued on December 1.
	I have included a Summary Journal prepared to capture the transactions from the normal course of business in 2023. The journal page
	is included for you to see if you would like. This is not a normal transaction but it was needed to make this scenario's numbers work
	without requiring you to prepare a TON of journal entries. Ignore the date of January 1.
Required:
1	Journalize the entries to record the transactions, and post to the general ledger. Assume a 360-day year.
2	Complete the worksheet. Information for the adjusting entries are as follows:
	a	Product warranty cost, $70,000.
	b	Accrue interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.
	c	The balance in the prepaid insurance account should be $9,000.
	d	Depreciation is calculated based on the following:
		The building has a $750 salvage value, 15 year life, and is adjusted using straight-line depreciation
		The office equipment has a 4 year life and will be depreciated using the double declining balance method with no anticipated salvage value.
		The tools have a 5 year life, $500 salvage value and will be depreciated using the double declining balance method
	e	The note receivable is a 5 month 5% note received on October 1
	f	Inventory of supplies on hand shows a balance of $2,600.
	g	Payroll for the month of December will be paid on January 3.
		Salaries for the month not yet paid are $32,000. The employer and employee is responsible for Social Security tax at a rate of 6.2%
		and Medicare tax at a rate of 1.45%. No employees have met the Social Security maximum. Round your calculations to the whole dollar.
		Federal income tax is withheld from employees pay at the rate of 10%. Pensions are accrued at 10% of pay and are 100% employer funded.
3	Journalize the adjusting entries and post them to the general ledger.
4	Prepare a multi-step income statement for the year ended December 31, 2023.
5	Prepare the statement of stockholders equity for the year ended December 31, 2023.
6	Prepare the balance sheet dated December 31, 2023.
7	Journalize and post the closing entries.
8	Prepare a post-closing trial balance.

		CHART OF ACCOUNTS
		Sherwood Co.
		General Ledger
	ASSETS		REVENUE
110	Cash	410	Sales
111	Accounts Receivable	610	Interest Revenue
112	Interest Receivable		EXPENSES
113	Notes Receivable	510	Cost of Goods Sold
115	Inventory	520	Salaries Expense
116	Supplies	524	Depreciation Expense-Building
118	Prepaid Insurance	525	Delivery Expense
120	Land	526	Repairs Expense
123	Building	529	Selling Expenses
124	Accumulated Depreciation-Building	531	Rent Expense
125	Office Equipment	532	Depreciation Expense-Office Equipment
126	Accumulated Depreciation-Office Equipment	533	Depreciation Expense-Tools
127	Tools	534	Insurance Expense
128	Accumulated Depreciation-Tools	535	Supplies Expense
	LIABILITIES	536	Payroll Tax Expense
210	Accounts Payable-Kirkwood Co.	538	Benefits Expense
211	Accounts Payable-Greenwood Co.	539	Cash Short and Over
212	Accounts Payable-Poulin Co.	540	Product Warranty Expense
213	Interest Payable	541	Miscellaneous Expense
214	Notes Payable	710	Interest Expense
215	Salaries Payable	720	Litigation Loss
216	FICA Payroll Taxes Payable	720	Litigation Loss
217	Employees Federal Income Tax Payable
218	Payroll Benefits Payable
228	Product Warranty Payable
229	Litigation Claims Payable
	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends

GENERAL JOURNAL	Page:	23
	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1	2023
2	Dec	31	Cash	110	223,875.00
3			Accounts Receivable	111	25,000.00
4			Notes Receivable	113	18,000.00
5			Supplies	116	6,750.00
6			Prepaid Insurance	118	12,000.00
7			Accounts Payable-Kirkwood Co.	210	25,000.00
8			Accounts Payable-Poulin Co.	212	10,000.00
9			Dividends	312	15,000.00
10			Cost of Goods Sold	510	530,000.00
11			Sales Salaries Expense	520	360,000.00
12			Delivery Expense	525	25,000.00
13			Repairs Expense	526	7,500.00
14			Selling Expenses	529	35,000.00
15			Rent Expense	531	48,000.00
16			Payroll Tax Expense	536	72,000.00
17			Benefits Expense	538	108,000.00
18			Cash Short and Over	539	375.00
19			Miscellaneous Expense	541	17,000.00
20			Inventory	115		25,000.00
21			Accounts Payable-Greenwood Co.	211		13,500.00
22			Sales	410		1,500,000.00
23			Year end summary posting