Reference no: EM133143469

Question - Cullumber Company's unadjusted trial balance at December 31, 2022, is presented below.

	Debit	Credit
Cash	$25,500
Accounts Receivable	36,500
Notes Receivable	8,800
Interest Receivable	0
Inventory	36,100
Prepaid Insurance	4,800
Land	21,100
Buildings	142,200
Equipment	61,600
Patents	9,800
Allowance for Doubtful Accounts		$550
Accumulated Depreciation-Buildings		47,400
Accumulated Depreciation-Equipment		24,640
Accounts Payable		27,200
Salaries and Wages Payable		0
Unearned Rent Revenue		5,400
Notes Payable (due April 30, 2023)		12,000
Interest Payable		0
Notes Payable (due in 2028)		36,000
Owner's Capital		107,510
Owner's Drawings	15,000
Sales Revenue		904,000
Interest Revenue		0
Rent Revenue		0
Gain on Disposal of Plant Assets		0
Bad Debts Expense	0
Cost of Goods Sold	634,000
Depreciation Expense	0
Insurance Expense	0
Interest Expense	0
Other Operating Expenses	61,300
Amortization Expense	0
Salaries and Wages Expense	108,000
Total	$1,164,700	$1,164,700

Unrecorded transactions:

1. On May 1, 2022, Cullumber purchased equipment for $16,000 plus sales taxes of $600 (all paid in cash).

2. On July 1, 2022, Cullumber sold for $3,600 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2022, was $2,000; 2022 depreciation prior to the sale of the equipment was $400.

3. On December 31, 2022, Cullumber sold on account $5,300 of inventory that cost $3,300.

4. Cullumber estimates that uncollectible accounts receivable at year-end are $3,800.

5. The note receivable is a 1-year, 8% note dated April 1, 2022. No interest has been recorded.

6. The balance in prepaid insurance represents payment of a $4,800 6-month premium on September 1, 2022.

7. The building is being depreciated using the straight-line method over 30 years. The salvage value is $33,000.

8. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost.

9. The equipment purchased on May 1, 2022, is being depreciated using the straight-line method over 5 years, with a salvage value of $2,500.

10. The patent was acquired on January 1, 2022, and has a useful life of 10 years from that date.

11. Unpaid salaries and wages at December 31, 2022, total $2,200.

12. The unearned rent revenue of $5,400 was received on December 1, 2022, for 3 months' rent.

13. Both the short-term and long-term notes payable are dated January 1, 2022, and carry a 9% interest rate. All interest is payable in the next 12 months.

Required - Prepare journal entries for the transactions listed above and adjusting entries.