Winterschid Company’s trial balance at December 31, 2010, is presented below. All 2010 transactions have been recorded except for the items described below and on page 480.
Unrecorded transactions:
1. On May 1, 2008, Winterschid purchased equipment for $13,200 plus sales taxes of $600 (all paid in cash).
2. On July 1, 2008, Winterschid sold for $3,500 equipment which originally cost $5,000. Accumulated depreciation on this equipment at January 1, 2008, was $1,800; 2008 depreciation prior to the sale of equipment was $450.
3. On December 31, 2008, Winterschid old for $9,000 on account inventory that cost $6,300.
4. Winterschid estimates that uncollectible accounts receivable at year-end is $4,000.
5. The note receivable is a one-year, 8% note dated April 1, 2008. No interest has been recorded.
6. The balance in prepaid insurance represents payment of a $3,600 6-month premium on September 1,2008.
7. The building is being depreciated using the straight-line method over 30 years. The salvage value is $30,000.
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, 2008, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,800.
10. The patent was acquired on January 1, 2008, and has useful life of 10 years from that date.
11. Unpaid salaries at December 31, 2008, total $2,200.
12. The unearned rent of $6,000 was received on December 1, 2008, for 3 months rent.
13. Both the short-term and long-term notes payable are dated January 1, 2008, and carry a 9% interest rate. All interest is payable in the next 12 months.
Requirements A to D.