Company ABC began its operations on January 2, 2022. The company had the following transactions during 2022:

1. On January 4, the company issued 120,000 shares of common stock to a group of investors for $3.00 per share with par value of $0.45 per share.

2. On May 1, it borrowed $20,000 from Bank of America, with interest rate of 12%. Interest on the loan is due on March 31, 2023, which is also the due date of the loan.

3. On July 1, the company acquired a new wireless networking equipment. The list price was $80,000. Because the company agreed to pay cash, it qualified for a discount of 8%. Payments for necessary transportation, software, licenses, and installation totaled $4,400. The company estimated a useful life of 5 years and a residual value of $8,000 for the equipment and used straight-line depreciation.

4. In December, the company declared a dividend of $0.03 per share, payable on April 15, 2023.

5. For the year, the company received cash payment of $137,000 from its customers. On December 31, 2022, customers still owed a total of $54,000 to the company.

6. Inventories purchased on account totaled $79,000 for 2022. Cash payments to the inventory supplier totaled $55,000, including inventories purchased for cash of $34,000. On December 31, 2022, the company had inventory of $29,000 on hand.

7. Payment of wages and salaries totaled $58,000 for the year. On December 31, 2022 the company owed its employees $7,400.

8. As a new business during the year of 2022, the company is exempt from both federal and state income taxes.

REQUIRED:

1. Use an excel spreadsheet to prepare journal entries for all transactions and adjusting entries for Company ABC during the year of 2022, including trial balances and closing entries. Please show the formula of your computations in your Excel spreadsheet.

2. Prepare properly formulated (a) income statement and (b) balance sheet for the year of 2022.