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$.,$ $$200,000,$ terms n$/30.$

$31$ Issued a $30-$day, $6\%$ note for $$200,000$ 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 $1.$

Required:

$3$ Complete the worksheet. Information for the adjusting entries are as follows:

a Product warranty cost, $$50,000.$

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 $$4,000.$

d Depreciation is calculated based on the following:

The building has a $$750$ salvage value, $15$ year life, and is adjusted using straightline depreciation

The office equpment 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 $($balance informations is in the General Ledger$)$ is a $5$ month $5\%$ note received on October $1$

f Inventory of supplies on hand shows a balance of $$2,700.$

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 $6\mathrm{.}2\%$

and Medicare tax at a rate of $1\mathrm{.}45\%.$ 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.