ACCOUNTING CYCLE REVIEW ACR1O Aimes Corporation's balance sheet at December 31, 2016, is presented below AIMES CORPORATION Balance Sheet December 31, 2016 Cash Inventory Prepaid insurance Equipment S 30,000 30.750 5,600 38,000 $104,350 Accounts payable Interest payable Bonds payable Common stock Retained earnings s 13,750 2,500 50,000 25,000 13,100 $104,350 During 2017, the following transactions occurred. Aimes uses a perpetual inventory system. 1. Aimes paid $2,500 interest on the bonds on January 1, 2017 2. Aimes purchased $241,100 of inventory on account. 3. Aimes sold for $480,000 cash inventory which cost $265,000. Aimes also collected $28,800 sales taxes. 4. Aimes paid $230,000 on accounts payable 5. Aimes paid $2,500 interest on the bonds on July 1, 2017. 6. The prepaid insurance ($5,600) expired on July 31 7. On August 1, Aimes paid $10.200 for insurance coverage from August 1,2017, through July 31, 2018 8. Aimes paid $17,000 sales taxes to the state 9. Paid other operating expenses, $91,000 10. Redeemed the bonds on December 3 11. Issued $90,000 of 8% bonds on December 31, 2017, at 103. The bonds pay interest 1, 2017, by paying $48,000 plus $2.500 interest. every June 30 and December 3 1 . Adjustment data: . Recorded the insurance expired from item 7. 2. The equipment was acquired on December 31, 2016, and will be depreciated ona straight-line basis over 5 years with a $3,000 salvage value income tax rate is 30%. (Hin: Prepare the income statement up to income term taxes and multiply by 30% to compute the amount.) Instructions You may want to set up Taccounts to determine ending balances.) a) Prepare journal entries for the transactions listed above and adjusting entries. (b) Prepare an adjusted trial balance at December 31, 2017 c) Prepare an income statement and a retained earnings statement for the year ending December 31, 2017, and a classified balance sheet as of December 31, 2017