Additional Information (for all entries; please see the posted Excel spreadsheet):

1. Sales for 2020 are $310,000. All sales are on credit.
2. Gross Margin ratio is 40 percent
3. Accounts Receivable:
   1. $190,000 of the accounts receivable is paid by the end of the year (the remaining balance remains on the balance sheet).
   2. $4,000 of A/R is written off during the year.
   3. 5% of A/R (after write-off and collections) is considered to be uncollectible.
4. Inventory:
   1. Inventory purchases are $180,000, all on credit.
   2. All accounts payable is from inventory purchases; all but $12,000 of inventory purchased is paid by the end of the year.
5. Additional equipment is purchased on 4/1/20 for $20,000 cash. All equipment when new, including the new purchase, has/had a 5-year life, no salvage value, and is depreciated using the straight-line method.
6. The building depreciates at $5,000 per year.
7. Half of the marketable securities were sold for $1,200. The FMV and cost of the other half of the securities are the same, so no adjustment to FMV is required.
8. Salaries are $2,200 per month (12 months of salaries expense must be booked). It is expected that one-half month will be owed on 12/31/20 because of when payday falls (therefore, 11.5 months of salaries have been paid and month is still owed to the employees at year end).
9. $55,000 in cash is borrowed on 9/30/20 by issuing a Note Payable. Interest is 8% per year.
10. The bonds were sold at face value last December and pay interest on Dec. 31, 2020.
11. 10,000 additional shares of stock were sold for $3 a share.
12. Insurance costing $18,000 was purchased on 6/1/20 (the same time in which the old policy expired. The new policy was for 12 months).
13. On Dec. 31, 2020, 1000 shares of stock are repurchased from the market at $2.90/share (treasury stock).
14. The tax rate is 20 percent. Income taxes for the current year are due and therefore paid during the first two months of the next year (you will have to complete an entry to pay the 2019 taxes, however the 2020 taxes will not be paid until the end of January 2021).
15. Dividends of $3,000 were paid during 2020.
16. The unearned revenue has been earned during the year (classified as other revenue on the multi-step income stmt.).

2019 Ending Balances Cash Marketable Securities Accounts Rec. Allowance for Bad Debt Inventory Prepaid Insurance Land Building Accumulated Dep. - Building Equipment Accumulated Dep. - Equipment Accounts Payable Salaries Payable Unearned Revenue Interest Payable Income Taxes Payable Note Payable Bonds Common Stock Additional Pd-in-Capital Retained Earnings DEBITS CREDITS 17,000 2,000 14,000 2,000 15,000 5,000 30,000 150,000 45,000 100,000 20,000 9,000 2,000 3,000 100,000 50,000 80,000 22,000 3. Prepare a Statement of Retained Earnings for the year ended 2020. 4. Prepare a Balance Sheet dated Dec. 31, 2020 Again a flexible design is required so any changes will automatically update the balance sheet use formulas. 5. Prepare a Statement of Cash Flows using the indirect method for the year ended 2020. The ending cash as shown on the statement of cash flows will be the same as the cash reported on the Balance Sheet