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On December 1, 2017, Splish Brothers Inc. had the account balances shown below.

		Debits				Credits
Cash		$5,200		Accumulated DepreciationEquipment		$1,390
Accounts Receivable		3,830		Accounts Payable		3,050
Inventory (3,100 x $0.60)		1,860		Common Stock		9,500
Equipment		21,700		Retained Earnings		18,650
		$32,590				$32,590

The following transactions occurred during December.

Dec. 3		Purchased 4,100 units of inventory on account at a cost of $0.67 per unit.
5		Sold 4,500 units of inventory on account for $0.90 per unit. (It sold 3,100 of the $0.60 units and 1,400 of the $0.67.)
7		Granted the December 5 customer $270 credit for 300 units of inventory returned costing $240. These units were returned to inventory.
17		Purchased 2,000 units of inventory for cash at $0.80 each.
22		Sold 1,900 units of inventory on account for $0.91 per unit. (It sold 1,900 of the $0.67 units.)

Adjustment data:

1.		Accrued salaries and wages payable $440.
2.		Depreciation on equipment $180 per month.
3.		Income tax expense was $190, to be paid next year.

1. Journalize the December transactions and adjusting entries, assuming Harrisen uses the perpetual inventory method. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

2. Enter the December 1 balances in the ledger T-accounts and post the December transactions. (Post entries in the order of journal entries presented above.)

3. Prepare an adjusted trial balance as of December 31, 2017.

4. Prepare an income statement for December 2017.

5. Prepare a classified balance sheet at December 31, 2017. (List current assets in order of liquidity.)

6. (a) Compute ending inventory and cost of goods sold under FIFO, assuming Harrisen Company uses the periodic inventory system.

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