Balance Sheet December 31, 2016 Cash Inventory Prepaid Insurance Equipment 15,000 15,375 2,800 19,000 52,175 During 2017, the following transactions occurred. Aimes uses a perpetual inventory system. 1.) Patriots paid $1,250 interest on the bonds on January 1, 2017 2.) Patriots purchased 120,550 of inventory on account 3.) Patriots sold for $240,000 cash inventory which cost $265,000. Aimes also collected $28,800 sales tax 4.) Patriots paid $115,000 on accounts payable. 5.) Patriots paid $1,250 interest on the bonds on July 1, 2017. 6.) The prepaid insurance ($2,800) expired on July 31. 7.) On August 1, Aimes paid $5,100 for insurance coverage from August 1, 2017, through July 31, 2018. 8.) Patriots paid $8,500 sales taxes to the state. 9.) Paid other operating expenses, $45,500. 10.) Redeemed the bonds on December 31, 2017, by paying $24,000 plus $1,250 interest. 11.) Issued $45,000 of 8% bonds on December 31, 2017 at 103. The bonds pay interest every June 30 and December 31. Total Assets Accounts payable Interest payable Bonds payable Common stock Retained earnings 6,875 1,250 25,000 12,500 6,550 52,175 Total Liabilities Adjustment data: 1.) Recorded the insurance expired from item 7. 2.) The equipment was acquired on Devember 31, 2016, and will be depreciated on a straint-line basis over 5 years with a $3,000 salvage value. 3.) The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) This needs to be included in your adjust trial balance. Instructions 1.) Prepare T-Accounts to determine ending balances 2.) Prepare journal entries for the transactions listed above and adjusting entries. 3.) Prepare an adjusted trial balance at December 31, 2017 4.) 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. Balance Sheet December 31, 2016 Cash Inventory Prepaid Insurance Equipment 15,000 15,375 2,800 19,000 52,175 During 2017, the following transactions occurred. Aimes uses a perpetual inventory system. 1.) Patriots paid $1,250 interest on the bonds on January 1, 2017 2.) Patriots purchased 120,550 of inventory on account 3.) Patriots sold for $240,000 cash inventory which cost $265,000. Aimes also collected $28,800 sales tax 4.) Patriots paid $115,000 on accounts payable. 5.) Patriots paid $1,250 interest on the bonds on July 1, 2017. 6.) The prepaid insurance ($2,800) expired on July 31. 7.) On August 1, Aimes paid $5,100 for insurance coverage from August 1, 2017, through July 31, 2018. 8.) Patriots paid $8,500 sales taxes to the state. 9.) Paid other operating expenses, $45,500. 10.) Redeemed the bonds on December 31, 2017, by paying $24,000 plus $1,250 interest. 11.) Issued $45,000 of 8% bonds on December 31, 2017 at 103. The bonds pay interest every June 30 and December 31. Total Assets Accounts payable Interest payable Bonds payable Common stock Retained earnings 6,875 1,250 25,000 12,500 6,550 52,175 Total Liabilities Adjustment data: 1.) Recorded the insurance expired from item 7. 2.) The equipment was acquired on Devember 31, 2016, and will be depreciated on a straint-line basis over 5 years with a $3,000 salvage value. 3.) The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) This needs to be included in your adjust trial balance. Instructions 1.) Prepare T-Accounts to determine ending balances 2.) Prepare journal entries for the transactions listed above and adjusting entries. 3.) Prepare an adjusted trial balance at December 31, 2017 4.) 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