The Purple Company This project will give you an opportunity to apply your knowledge of accounting principles and procedures to a corporation. You will handle the accounting work of The Purple Company for 2022. Introduction The chart of accounts and account balances of The Purple Company shown in your text have been used to open general ledger accounts with opening balances for January 1, 2022. The company does not use reversing entries.

Other Data Estimated federal income taxes are to be recorded using the tax rate of 21%. Round your amount to the nearest dollar.

DATE	TRANSACTIONS FOR 2022
Jan.	5	Issued 1,000 shares of 5 percent $100 par preferred stock for $101 per share. (The corporation has been authorized to issue 10,000 shares of preferred stock.)
	15	Paid estimated income taxes of $17,000 accrued at the end of 2021.
Apr.	1	Paid semiannual bond interest on the 10-year, 10 percent bonds payable and amortized the premium for the period since December 31, 2021. (The interest and premium were recorded as of December 31, 2021; the entry was not reversed.) The bonds were issued on October 1, 2020, at a price of 103, and they mature on October 1, 2030. Use straight-line amortization.
July	1	The board of directors declared a cash dividend of $0.10 per share on the common stock. The dividend is payable on July 26 to stockholders of record as of July 15.
	26	Paid the cash dividend on the common stock.
Aug.	12	A purchaser of 600 shares of preferred stock issued on January 5 asked the corporation to repurchase the shares. The corporation repurchased the stock for $102 per share. The stock is to be held by the corporation until it can be resold to another purchaser.
Oct.	1	Paid the semiannual bond interest and recorded amortization of the bond premium.
Dec.	1	Because of its good cash position and current bond prices, The Purple Company repurchased and retired $20,000 par value of the 10 percent bonds that it has outstanding. The repurchase price was 98, plus accrued interest.
	15	The companys board of directors declared a cash dividend of $5 per share on the outstanding preferred stock. This dividend is payable on January 10 to stockholders of record as of December 31.
	15	The board of directors also declared a 10 percent stock dividend on the outstanding common stock. The new shares are to be distributed on January 10 to stockholders of record as of December 31. At the time the dividend was declared, the common stock had a fair market value of $15 per share.
	30	Received a subscription for 500 shares of The Purple Companys common stock at $12 per share from the companys president. Received cash equal to one-half the purchase price on the date of subscription. The balance of the purchase price is to be paid on January 15, 2023. (The subscriber will not be entitled to the stock dividend previously declared on the outstanding shares of common stock.)
	30	Because the management of Purple foresees the need to expand a warehouse the firm owns, the board of directors has restricted future dividend payments. Record the appropriation of $100,000 of retained earnings for plant expansion.
		SUMMARY OPERATING TRANSACTIONS FOR 2022
	31	Total sales of merchandise for the year were $2,800,000. All sales were on credit.
	31	Total collections on accounts receivable during the year were $2,810,000.
	31	Total purchases of merchandise for the year were $1,880,000. All purchases were on credit.
	31	Total operating expenses incurred during the year were $650,000. (Debit Operating Expenses and credit Accounts Payable.)
	31	Total cash payments on accounts payable during the year were $2,335,000.
	31	Total accounts receivable charged off as uncollectible during the year were $10,000. (The Purple Company uses the allowance method to record uncollectible accounts.)
		DATA FOR YEAR-END ADJUSTMENTS
	31	The balance of Allowance for Doubtful Accounts should be adjusted to equal 3 percent of the balance of Accounts Receivable. (Debit Operating Expenses.)
	31	Depreciation on the buildings should be recorded. (Debit Operating Expenses.) The firm uses the straight-line method and an estimated life of 20 years to compute this adjustment.
	31	Depreciation on furniture and equipment should be recorded. The firm uses the straight-line method and an estimated life of 10 years to compute this adjustment. (Debit Operating Expenses.)
	31	Accrued interest on the outstanding bonds payable of The Purple Company should be recorded and the premium amortized.
	31	The ending merchandise inventory is $130,000.

Required:

1. General Journal tab: Analyze the transactions for 2022 and record each transaction in the general journal.
2. General Ledger tab: Post the general journal entries to the general ledger on a daily basis.
3. Worksheet tab: Prepare a worksheet for the year ended December 31, 2022.
4. Income Statement tab: Prepare a summary income statement for the year ended December 31, 2022.
5. Stmt of RE tab: Prepare a statement of retained earnings for the year ended December 31, 2022.
6. Balance Sheet tab: Prepare a balance sheet as of December 31, 2022.
7. Adjusting and Closing tab: Record the adjusting entries and the closing entries in the general journal.
8. General Ledger tab: Post the adjusting entries and the closing entries to the general ledger accounts.