CP8 Posada Corporation's balance sheet at December 31, 2009, is presented below. POSADA CORPORATION Balance Sheet December 31, 2009 Cash $13,100 Accounts payable Accounts receivable 19,780 Common stock Allowance for doubtful accounts (1,000) Retained earnings Merchandise inventory 9,400 $41,280 $ 8,750 20,000 12,530 $41,280 11 During January 2010, the following transactions occurred. Posada uses the perpetual inventory method. Jan. 1 Posada accepted a 4-month, 12% note from Alien Company in payment of Alien's $1,000 account. 3 Posada wrote off as uncollectible the accounts of Ex Corporation ($450) and Files Company ($230). 8 Posada purchased $17,200 of inventory on account. Posada sold for $25,000 on account inventory that cost $17,500. 15 Posada sold inventory that cost $700 to Ben Borke for $1,000. Borke charged this amount on his Visa First Bank card. The service fee charged Posada by First Bank is 3%. 17 Posada collected $22,900 from customers on account. 21 Posada paid $16,300 on accounts payable. 24 Posada received payment in full (5230) from Files Company on the account written off on January 3. Posada purchased advertising supplies for $1,400 cash. 31 Posada paid other operating expenses, $3,218. 27 Adjustment data: 1. Interest is recorded for the month on the note from January 1. 2. Bad debts are expected to be 6% of the January 31, 2010, accounts receivable. 3. A count of advertising supplies on January 31, 2010, reveals that $560 remains unused. 4. The income tax rate is 30%. (Hint: Prepare the income statement up to "Income before taxes" and multiply by 30% to compute the amount.) Instructions (You may want to set up T accounts to determine ending balances.) (a) Prepare journal entries for the transactions listed above and adjusting entries. (b) Prepare an adjusted trial balance at January 31, 2010