Vicit Corp. manufactures steel parts for companies in the automotive and aeronautic industry. It makes all sales of its inventory on credit (i.e. all sales revenue is derived from credit sales), extending cash discounts with terms 2/10, n/30 and opportunities for sales returns within a 30-day window from the point of delivery. Vicit uses the gross method to account for cash discounts and the balance sheet method to account for its bad debt expense arising from uncollectible accounts.

Vicit uses straight-line methods to allocate costs for both its fixed and intangible assets. Factories are assigned a 30-year useful life, equipment a 5-year useful life and its patents have a 7-year useful life. The company anticipates no salvage on any of its long-term operating assets.

During 2021, Vicit decided to discontinue a component of its operations and successfully sold it in December. It attributes 10% of its total operating income to the discontinued component in determining the income (loss) from the discontinued component.

The companys effective tax rate is 20%.

The following is unadjusted trial balance at 12/31/21 (all $ values in thousands). The accounts are not organized in the traditional way of trial balances (that would make the balance sheet too easy to make!)

	Debit	Credit
Factories	20,000
Bonds payable (due 2030)		10,000
Inventory	3,500
Allowance for sales returns		3
Common stock		300
Accounts payable		800
Deferred revenue		4,000
Accumulated depreciation factories		1,000
Prepaid insurance contracts	300
Patents	900
Equipment	5,000
Available for sale debt securities	600
Salary expense	3,000
Research and development	2,700
Additional paid-in capital		2,000
Accumulated depreciation equipment		600
Accounts receivable	1,000
Accumulated other comprehensive income		200
Trading securities	90
Dividends payable		20
Retained earnings		11.100
Treasury stock	200
Sales revenue		14,000
Utilities expense	30
Cost of goods sold	5,500
Allowance for doubtful accounts		5
Sales discounts	238
Land	100
Cash and equivalents	220
Loss on disposal of discontinued operations	650

Additional information (some but not all of this information will be used to determine adjusting entries, dont assume everything here is an adjusting item):

1. 10% of the cash equivalent balance on the unadjusted trial balance is legally restricted and tied to the companys long-term bonds payable.