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Cash $3,090

Accounts Receivable 9,900

Allowance for Doubtful Accounts $100

Inventory 17,750

Supplies 1,400

Land 9,000

Buildings and Equipment 42,000

Accumulated Depreciation 4,200

Accounts Payable 10,700

Common Stock 20,000

Retained Earnings (1/1/2016) 42,400

Dividends 2,000

Sales Revenue 69,700

Cost of Goods Sold 36,860

Salaries Expense 12,500

Advertising Expense 8,100

Other Expenses 4,500

Dec. 4 Made cash sales of $3,000; the cost of the inventory sold was $1,800.

7 Purchased $2,400 of inventory on credit.

14 Collected $900 of accounts receivable.

18 Sold land for $7,800; the land originally cost $5,000.

20 Made credit sales of $4,000; the cost of the inventory sold was $2,400.

21 Returned $360 of defective inventory to supplier for credit to the Davis Companys account.

27 Purchased $1,250 of inventory for cash.

28 Paid $1,100 of accounts payable.

31 Purchased land at a cost of $6,000; made a $1,000 down payment and signed a 12%, 2-year note for the balance.

Required: 1. Prepare general journal entries to record the preceding transactions.

2. Post to general ledger T-accounts.

3. Prepare a year-end trial balance on a worksheet and complete the worksheet using the following information:

a. accrued salaries at year-end total $1,200;

b. for simplicity, the building and equipment are being depreciated using the straight-line method over an estimated life of 20 years with no residual value;

c. supplies on hand at the end of the year total $630;

d. bad debts expense for the year totals $830;

e. the income tax rate is 30%; income taxes are payable in the first quarter of 2017

4. Prepare the companys financial statements for 2016.

5. Prepare the 2016 (a) adjusting and (b) closing entries in the general journal.

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