Comprehensive Problem 7 (CP7) On December 1, 2010, Moreland Company had the following account balances.

AND SO ON

Instructions
(a) Journalize the December transactions. (Assume a perpetual inventory system.)
(b) Enter the December 1 balances in the ledger T accounts and post the December transactions. Use Cost of Goods Sold, Depreciation Expense, Insurance Expense, Salaries Expense, Sales, Sales Discounts, Income Tax Payable, and Income Tax Expense.
(c) The statement from Lyon County Bank on December 31 showed a balance of $22,164. A comparison of the bank statement with the cash account revealed the following facts.
1. The bank collected a note receivable of $2,500 for Moreland Company on December 15.
2. The December 31 receipts of $2,736 were not included in the bank deposits for December. The company deposited these receipts in a night deposit vault on December 31.
3. Checks outstanding on December 31 totaled $1,210.
4. On December 31 the bank statement showed a NSF charge of $800 for a check received by the company from C. Park, a customer, on account. Prepare a bank reconciliation as of December 31 based on the available information.
(Hint: The cash balance per books is $21,990. This can be proven by finding the balance in the Cash account from parts (a) and (b).)
(d) Journalize the adjusting entries resulting from the bank reconciliation and adjustment data.
(e) Post the adjusting entries to the ledger T accounts.
(f) Prepare an adjusted trial balance.
(g) Prepare an income statement for December and a classified balance sheet at December 31.

Check: (f) Totals $89,425; (g) Net income $ 1,325; Total assets $72,550