I am needing help getting the correct check figures on the Income Statement.

Check figure 1:Income from operations = $395,874.

-Check figure 2:Income before income taxes = $347,603.

ABC Corporation Adjusted Trial Balance December 31, 2016 Debit Credit Cash 875,444 Accounts receivable 442,120 Allowance for doubtful accounts 75,000 Inventory 70,000 Allowance to Reduce Inventory to NRV 16,000 Purchases 0 Prepaid insurance 4,500 Land 88,000 Building 37,500 Accumulated depreciation: building 1,265 Equipment 21,600 Accumulated depreciation: equipment 9,900 Patent 45,000 Accounts payable 88,851 Notes payable 40,000 Wages Payable 4,000 Interest Payable 35,300 Income taxes payable 111,391 Bonds Payable 700,000 Premium on Bonds Payable 52,045 Unearned rent revenue 9,000 Common stock 135,000 PIC In Excess of Par-Common Stock 130,000 Retained earnings 0 Dividends 28,000 Treasury Stock 10,000 PIC- Treasury Stock 6,000 Sales Revenue 790,000 Rent Revenue 4,500 Cost Of Goods Sole 177,000 Advertising expense 9,240 Wages expense 66,150 Office expense 28,500 Depreciation expense 11,165 Utilities expense 33,571 Insurance expense 22,500 Income taxes expense 111,931 Interest Expense 30,571 Bad Debt Expense 75,000 Loss on Impairment of Patent 5,000 Loss Due to Decline of Inventory NRV 16,000 2,208,792 2,208,252Instructions Unadjusted Trial Balance Adjustments Needed Adjusting Jour 12/31/16 Adjusting Journal Entries JE # Account Titles 1 Insurance Expense Debits Credits 2,250 Prepaid Insurance 2,250 2 Depreciation Expense 1,015 Accumulated Depreciation - Building 115 Accumulated Depreciation - Equipment 900 3 Unearned Rent Revenue 4,500 Rent Revenue 4,500 Wages Expense 4,000 Wages Payable 4,000 Interest Expense 300 Interest Payable 300 6 Inventory Cost of Goods Sold 70,000 177,000 Purchases 24,700 Loss Due to Decline of Inventory NRV 16,000 Allowance to Reduce Inventory to NRV 16,000 Loss on Impairment of Patent 5,000 Patent 5,000 8 Cash 16,000 Treasury Stock 10,000 PIC- Treasury Stock 6,000 9 Cash 100,000 Common Stock 10,000 PIC In Excess Of Par- Common Stock 90,000 10 Interest Expense Premium on Bonds Payable 30,271 4,729 Interest Payable 35,000 11 Bad Debit Expense 75,000 Allowance for Doubtful Accounts 75,000 12 Income Tax Expense 12,931 Income Tax Paya 12,391Instructions djusted Trial Balance Adjustments Needed l 011 Match 1, 2016, ABC purchased a one-year liability insurance policy for $27,000. Upon purchase, the following journal entry was made: Dr Prepaid insurance 27,000 Cr Cash 27,000 The expired portion ofinsuranoe must be recorded as of12/31/16. Notice that the expired portion from March through November has been recorded already. Make sure that the Prepaid Insurance balance after the adjusting entry is correct. 2 Depreciation expense must be recorded for the month of December. The building was purchased on February 1, 2016 for $37,500 with a remaining useful life of25 years and a salvage value of $3,000. The method of depreciation for the building is straighteline, The equipment was purchased on February 1, 2016 for $21,600 with a remaining useful life of4 years and a salvage value of$1,800. The method of depreciation for the equipment is double-declining balance. Depreciation has been recorded for the building and equipment for months February through November. 3 On December 1, 2016, XYZ Co. agreed to rent space in ABC's building for $4,500 per month, and XYZ paid ABC on December 1 in advance for the rst three months' rent. The entry made on December 1 was as follows: Dr Cash 13,500 Cr Unearned rent revenue 13,500 The unearned revenue account must be adjusted to reect the amount earned as of 12/31/16. 4 Per timecards. from the last payroll date through December 31, 2016. ABC's employees have worked a total 01200 hours, Including payroll 18x63. ABC's wage expense averages about $25 per hour, The next payroll date is January 5, 20171 The liability for wages payable must be recorded as of 12/3 1/ 16. 5 0n Novembw 30, 2016, ABC borrowed $40,000 from American National Batik by issuing an interest-bearing note payable. This loan is to be repaid in three months (on February 28, 2017). along with interest computed at an annual rate of 9%, The entry made on November 30 to record the borrowing was: Dr Cash 40,000 Cr Notes payable 40,000 On February 28, 2017 ABC must pay the bank the amount borrowed plus interest. Assume the beginning balance for Notes Payable is correct. Interest through 12/3 1/ 16 must be accrued on the $40,000 note. 6 ABC uses a periodic inventory system. and the ending inventory for each year is determined by taking a complete physical inventory at year-end, A physical count was taken on December 31, 2016. and the inventory on-hand at that time totaled $100,000, which reects historical cost, Record the adjusting entry for properly recognizing 2016 Cost of Goods Sold. Hint: This was the rst year ofoperan'orts, so beginning inventory balance is zero. Additionally, ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value at a total inventory level. A review of inventory data further indicated that the current retail sales value of the ending inventory is 590.000 and estimated costs of completion and shipping is 8% of retail, Be sure to make an additional adjustment, if necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accounting for adjustments of inventory to market value. 7 It would be unusual for a company to have an asset impairment in Year 1. but for the sake of this example. ABC determined that their intangible asset might be impaired on December 31, 2016. Record the impairment adjustment, if any. The expected future undiscounted net cash ows for this intangible asset totals $48,000, and the fair value of the asset is $45,000. 8 0n 7/ 1/1 6, ABC purchased 4,000 shares of in own stock from existing stockholders as treasury stock. The cost of the treasury stock was $5 per share, or $20,000 in total. The effects ofthis transaction are already shown in the unadjusted trial balance. On 12/31/16. ABC reissued 2,000 shares of the treasury stock at $8 per share. Record the journal entry required for the reissuance of the treasury stock. To refresh your memory, treasury stock is usually accounted for at cost. When treasury stock is reissued for more than its cost. a separate Paid-in Capital-Treasury Stock account should be used to account for the excess proceeds over cost. (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.) 9 On 12/31/16, ABC issued 10,000 shares of$1 par value common stock at the closing market price ofSlO per share. Prepare ABC'sjour-rtal entry to reect the issuance of the stock on 12/31/16. To refresh your memory, a Paid-in Capital in Excess of Par account should be used to account for excess proceeds over par value in a stock issuance transaction, (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.) 10 On 7/1/16, ABC sold 10% bonds having a maturity value of $700,000 for $756,773.50, resulting in an e'eetive yield of 8%. The bonds are dated 7/1/16, and mature 7/1/21. Interest is payable semiannually on July 1 and January 1. ABC uses the effective interest method of amortization for bond premium or discount. Record the adjusting entry for the accrual of interest and the related amortization on 12/31/16. Hint: Develop an abbreviated amortization schedule to accurately determine the interest expense. 11 ABC Corporation prepares an aging schedule on 12/31/16 that estimates total uncollectible accounts at $75,000, Assuming that the allowance method is used, prepare the entry to record bad debt expense for the calendar year. Do thisnul adjusting entry aerprepart'ng the Income Statement through the ne \"Income Before Income Taxes ".- 12 Corporate taxes are due in four estimated quarterly payments on April 15, June 15, September 15, and December 15. However, for the purposes of this ABC illustration, we will assume that estimates are not paid, and that the tax is paid in full on the retum's March 15, 2017 due date, ABC's income tax rate is 35%. The entire year's income mx expense was estimated at the beginning of 2016 to be $108,000, so January through November income tax expense recognized amounts to $99,000 (11/12 months). Since we are assuming estimates are not made during the year, the balance in Income taxes payable represents income tax accrued for Jantu through November. Assume no deferred tax assets or deferred tax liabilities. Based on the income before income taxes gure from the income statement. calculate and record Decembei's income tax expense adjustment so that the entire year's tax expense is correct (ie. the difference benveen total income tax expense and the amount already accrued through November). ABC Corporation Unadjusted Trial Balance December 31, 2016 Debit Credit Cash 759,444 Accounts receivable 442,120 Allowance for doubtful accounts 0 Inventory Allowance to Reduce Inventory to NRV 0 Purchases 247,000 Prepaid insurance 6,750 Land 88,000 Building 37,500 Accumulated depreciation: building 1,150 Equipment 21,600 Accumulated depreciation: equipment 9,000 Patent 50,000 Accounts payable 88,851 Notes payable 40,000 Income taxes payable 99,000 Unearned rent revenue 13,500 Bonds Payable 700,000 Premium on Bonds Payable 56,774 Common stock 125,000 PIC In Excess of Par-Common Stock 40,000 Retained earnings Treasury stock 20,000 Dividends 28,000 Sales Revenue 790,000 Advertising expense 9,240 Wages expense 62,150 Office expense 28,500 Depreciation expense 10,150 Utilities expense 33,571 Insurance expense 20,250 Income taxes expense 99,000 1,963,275 1,963,275Instructions Unadjusted Trial Balance Adj ABC Corporation Income Statement For the Year Ended December 31, 2016 Sales revenue 790,000 Cost of goods sold l Gross prot 613,000 Operating expenses: Advertising expense 9,240 Bad debt expense 75,000 Wages expense 66,150 Ofce expense 28,500 Depreciation expense 1 1,165 Utilities expense 33,571 Insurance expense Q, Total operating expenses mg Income 'om operations 366,874 Other Income and expenses: Rent revenue 4,500 Interest Expense 30,571 Loss Due to Decline of Inventory NRV -16,000 Loss on Impairment of Patent Total other Income and Expenses Income before income taxes 319,803 Income taxes @ 35% $331.05 Net Income 371.95