The unadjusted trial balance of Splish Brothers Inc., a private company following ASPE, at December 31, 2020, is as follows: Credit Cash Debit $17,010 104,300 Accounts receivable $3,500 60,100 4,632 50,400 31,000 Allowance for doubtful accounts Inventory Prepaid insurance Bond investment at amortized cost Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation equipment Goodwill 155,500 25,180 32,640 5,440 16,000 100,500 168,000 116,100 51,082 186,000 10,200 Accounts payable Bonds payable (20-year, 8%) Common shares Retained earnings Sales revenue Rent revenue Rent expense Supplies expense Purchases Purchase discounts Salaries and wages expense Interest expense 21,150 11,000 98,100 880 52,100 12,950 $666,882 $666,882 Additional information: 1. 2. 3. 4. 5. Actual rent costs amounted to $1,410 per month. The company has already paid for rent for the first quarter of 2021. The building was purchased and occupied on January 1, 2018, with an estimated useful life of 10 years, and residual value of $29,600. (The company uses straight-line depreciation.) Prepaid insurance contains the premium costs of several policies, including Policy A, cost of $2,616, one-year term, taken out on April 1, 2020; and Policy B, cost of $2,016, three-year term, taken out on September 1, 2020. A portion of Splish Brothers's building has been converted into a snack bar that has been rented to the Marigold Corp. since July 1, 2019, at a rate of $6,800 per year payable each July 1 in advance. One of the company's customers declared bankruptcy on December 30, 2020. It is now certain that the $2,300 the customer owes will never be collected. This fact has not been recorded. In addition, Splish Brothers estimates that 4% of the Accounts Receivable balance on December 31, 2020, will become uncollectible. An advance of $590 to a salesperson on December 31, 2020, was charged to Salaries and Wages Expense. On November 1, 2018, Splish Brothers issued 168 $1,000 bonds at par value. Interest is paid semi-annually on April 30 and October 31. The equipment was purchased on January 1, 2018, with an estimated useful life of 12 years, and no residual value. (The company uses straight-line depreciation.) On August 1, 2020, Splish Brothers purchased at par value 42 $1,200,9% bonds maturing on July 31, 2022. Interest is paid on July 31 and January 31. The inventory on hand at December 31, 2020, was $89,900 after a physical inventory count. (Use "Inventory" account for closing out the beginning inventory amount and recording the ending inventory amount.) 6. 7. 8. 9. 10. Prepare adjusting and correcting entries for December 31, 2020, using the information given. Record the adjusting entry for inventory using a cost of Goods Sold account. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. (To record write-off of uncollectible accounts receivable.) (To record bad debts expense.) 6. 7. 8. 9. 10