The unadjusted pre-closing 12/31/23 account balances for the Mahoney Company are listed below:

Net Sales	$11,015
Net Purchases	8,991
Selling Expenses	430
Cash	564
Machines	6,424
Accumulated Depreciation, Machines	1,996
Accounts Payable	1,236
Retained Earnings	4,182
Allowance for Doubtful Accounts	54
Building	4,400
Accumulated Depreciation, Building	429
Common Stock	5,000
Accounts Receivable	1,240
Depreciation Expense, Machines	913
Inventory @ 1/1/23 (periodic method used)	950

During your audit, you discover the following five items that have yet to be recorded:

1. No depreciation on the building has been recorded in 2023. Depreciation on the building is based on Double-Declining Balance. It was purchased on 1/1/21 and has an estimated useful life of 40 years. The estimated salvage value is $700.
2. Mahoney exchanged a machine for a similar machine on 12/31/23. The original machine cost $3,705 and had a book value of $2,470. The new machine had a fair value of $2,754; Mahoney also received $306 in cash. The exchange did not have commercial substance.
3. Mahoney also exchanged its only other machine for a different machine on 12/31/2 The original machine cost $2,719 and had a book value of $1,958. The fair value was $2,125. Mahoney paid cash of $487 as well. The exchange did not have commercial substance.
4. Mahoney uses the Balance Sheet approach to adjust Accounts Receivable to Net Realizable Value. At 12/31/23, uncollectible receivables are estimated to be 5% of Accounts Receivable.
5. Ending Inventory is to be estimated using the Gross Profit Method. The historic Gross Profit percentage is 22%.

Required

1. Record journal entries for items #1-#4 above; show supporting computations. In addition, compute ending inventory per #5 above; show supporting computations. Then make the adjusting/closing journal entry to close Purchases, adjust Inventory, and record CGS. Do not show other closing entries; assume they were made properly.
2. Draft the 2023 Condensed Income Statement and the 12/31/23 Balance Sheet. Use the Cabrera (Textbook Illustration 4-3 in Chapter 4) and the Uptown Cabinet (Textbook Illustration 3-41 in Chapter 3) format examples in the text. Assume no taxes. Do not include EPS.