On December 1, 2010, Gonzalez Company had the account balances shown below.

The following transactions occurred during December.
Dec. 3 Purchased 4,000 units on account at a cost of $0.75 per unit.
5 Sold 4,500 units on account for $0.90 per unit. (It sold 3,000 of the
$0.60 units and 1,500 of the $0.75)
7 Granted the December 5 customer $180 credit for 200 units returned costing $150. These units were returned to inventory.
17 Purchased 2,400 units for cash at $0.80 each.
22 Sold 2,000 units on account for $0.95 per unit. (It sold 2,000 of the $0.75 units).

Adjustment data:
1. Accrued salaries payable $400.
2. Depreciation $200 per month.
3. Income tax expense was $175, to be paid next year.
Instructions
(a) Journalize the December transactions and adjusting entries assuming Gonzalez uses the perpetual inventory method.
(b) Enter the December 1 balances in the ledger T accounts and post the December transactions. In addition to the accounts mentioned above use the following additional accounts: Cost of Goods Sold, Depreciation Expense, Salaries Expense, Salaries Payable, Sales, Sales Returns and Allowances Income Tax Expense and Income Tax Payable.
(c) Prepare an adjusted trial balance as of December 31, 2010.
(d) Prepare an income statement for December 2010 and a classified balance sheet at December 31, 2010.
(e) Compute ending inventory and cost of goods sold under FIFO assuming Gonzalez Company uses the periodic inventory system.
(f) Compute ending inventory and cost of goods sold under LIFO assuming Gonzalez Company uses the periodic inventorysystem.

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Debits Credits Cash Accounts Receivable Merchandise Inventory 1,800 Common Stock Equipment 4,800 Accumulated Depreciation Equipment 1,500 3,000 10,000 17,000 $31,500 3,900 Accounts Payable 21,000 Retained Earnings $31,500