Data for adjustments at December 31, 2008, are as follows:
(a) Taipei International uses a perpetual inventory system.
(b) An analysis of Accounts Receivable reveals that the appropriate year-end balance in Allowance for Bad Debts is $750.
(c) Equipment depreciation for the year totaled $32,000.
(d) A recheck of the inventory count revealed that goods costing $5,600 were wrongly excluded from ending inventory. The goods in question were not shipped until January 3, 2009. A related receivable for $8,200 was also mistakenly recorded.
(e) Interest on the note payable has not been accrued. The note was issued on March 1, 2008, and the interest rate is 12%.
(f) The balance in Insurance Expense represents $3,000 that was paid for a 1-year policy on October 1. The policy went into effect on October 1.
(g) Dividends totaling $7,800 were declared on December 25.The dividends will not be paid until January 15, 2009. No entry was made.

Instructions:
1. Journalize the necessary adjusting entries. (Ignore income tax effects.)
2. Journalize the necessary closing entries.
3. Prepare a post-closing trial balance.
4. Can a company pay dividends in a year in which it has a net loss? Can a company owe income taxes in a year in which it has a netloss?

Taipel International Corporation Unadjusted Trial Balance December 31, 2008 Debit Credit 31,500 25,000 Accounts Receivable Allowance for Bad Debts $ 250 41,700 190,000 Accounts Payable Notes Payable Wages Payable Income Taxes Payable . Common Stock 51,000 31,000 70,000 8,000 40,000 34,100 310,000 2,000 Sales Revenue Interest Revenue Cost of Goods Sold Wages Expense 205,250 lities Expense Insurance Expense Advertising Expense Income Tax Expense 3,200 6,000 3.000 5,000 7.200 $562850 562850