PROBLEM 22-7

(1)
Depreciation Expense............................................................................ 3,200
Accumulated Depreciation—Delivery Vehicles .......................... 3,200
(2)
Income Summary ................................................................................... 19,000
Retained Earnings ........................................................................ 19,000
(3)
Cash .......................................................................................... 5,600
Accounts Receivable ................................................................... 5,600
(4)
Accumulated Depreciation—Equipment .............................................. 25,000
Equipment..................................................................................... 21,300
Gain on Sale of Equipment .......................................................... 3,700
(5)
Litigation Loss ....................................................................................... 125,000
Estimated Litigation Liability ....................................................... 125,000
(6)
Unrealized Holding Gain or Loss—Income .......................................... 2,000
Fair Value Adjustment (Trading) ................................................. 2,000
(7)
Salaries and Wages Payable ($16,000 – $12,200) ................................ 3,800
Salaries and Wages Expense ...................................................... 3,800
(8)
Depreciation Expense............................................................................ 5,000
Equipment .............................................................................................. 40,000
Maintenance and Repairs Expense ............................................. 40,000
Accumulated Depreciation—Equipment..................................... 5,000
(9)
Insurance Expense ($12,000 ÷ 3) ................................................................ 4,000
Prepaid Insurance ........................................................................................ 6,000
Retained Earnings .............................................................................. 10,000
(10)
Amortization Expense ($50,000 ÷ 10).......................................................... 5,000
Retained Earnings ....................................................................................... 5,000
Trademarks ......................................................................................... 10,000