Please help with the attached comprehensive accounting problem. Thanks!

Read ALL instructions before getting started! ABC Corporation is a new company that buys and sells office supplies. Business began on January 1, 2012. Given on the first two tabs are ABC's 12/31/12 Unadjusted Trial Balance and a list of needed adjustments. 1. Make all eight adjustments on the "Adjusting Journal Entries" tab. Remember to include a description under each journ 2. Post the adjustments to the general ledger on the "123112 TAccounts" tab. You will have to add TAccounts for new Link your TAccount entries to your Journal Entries. 3. Once the 12/31/12 TAccounts are complete, prepare the Adjusted Trial Balance. There may be some accounts with zer may have to insert lines for new accounts. Link the Adjusted Trial Balance to your TAccounts. 4. Use the Adjusted Trial Balance numbers to complete the Income Statement, Statement of Retained Earnings, and Balanc Link your financial statements to your Adjusted Trial Balance. 5. When the Financial Statements are complete, make the closing entries on the "Closing Entries" tab. 6. When closing entries have been made, post the entries to the general ledger on the "AfterClose TAccounts" tab. Make journal entries are also on your AfterClose TAccounts. They will not automatically flow from tabtotab. 7. The final step is the AfterClosing Trial Balance, which will use the ending balances from the 1/1/13 TAccounts. 8. Doublecheck your work. Here are a few things to check for: Adjusted Trial Balance: Make sure debit column and credit column total to the same figure at the bottom. Net income from the income statement will flow through to the Statement of Retained Earnings. Ending Retained Earnings from the Statement of Retained Earnings will flow through to the Balance Sheet. The AfterClosing Trial Balance should not have any revenue or expense accounts. Check figure 1: Cost of Goods Sold adjusted balance = $700. Check figure 2: Net Income = $55,117. Check figure 3: Total Assets = $165,465. Check figure 4: AfterClosing Trial Balance debit and credit columns total $171,240. Remember: Neatness matters in Financial Statements. Print or Print Preview before submitting to make sure you Otherwise, management may send back to you for revision! Include your work at the bottom of each tab as needed. Ask questions prior to the dayight before the due date. The due date is on the course schedule. ABC Corporation Trial Balance December 31, 2012 Cash Accounts receivable Inventory Purchases Prepaid insurance Land Building Accumulated depreciation: building Equipment Accumulated depreciation: equipment Patent Accounts payable Notes payable Income taxes payable Unearned rent revenue Capital stock Retained earnings Dividends Sales Revenue Advertising expense Wages expense Office expense Depreciation expense Utilities expense Insurance expense Income taxes expense $39,640 6,500 800 1,000 4,500 52,000 36,000 12,000 30,000 14,000 3,900 56,800 6,900 5,250 19,400 13,500 22,000 $324,190 $1,250 4,000 2,690 4,000 22,000 9,000 80,000 201,250 $324,190 1 On March 1, ABC purchased a oneyear liability insurance policy for $18,000. Upon purchase, the following journal entry was made: Dr Prepaid insurance 18,000 Cr Cash 18,000 The expired portion of insurance must be recorded as of 12/31/12. 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 (straightline) for the month of December. The building was purchased on February 1, 2012 for $36,000 with a remaining useful life of 20 years and a salvage value of $6,000. The method of depreciation for the building is straightline. The equipment was purchased on February 1, 2012 for $12,000 with a remaining useful life of 5 years and a salvage value of $500. The method of depreciation for the equipment is doubledeclining balance. Depreciation has been recorded for the building and equipment for months February through November. 3 On December 1, XYZ Co. agreed to rent space in ABC's building for $3,000 per month, and XYZ paid ABC on December 1 in advance for the first three months' rent. The entry made on December 1 was as follows: Dr Cash 9,000 Cr Unearned rent revenue 9,000 The unearned revenue account must be adjusted to reflect the amount earned as of 12/31/12. 4 Per timecards, from the last payroll date through December 31, 2012, ABC's employees have worked a total of 130 hours. Including payroll taxes, ABC's wage expense averages about $15 per hour. The next payroll date is January 5, 2013. The liability for wages payable must be recorded as of 12/31/12. 5 On November 30, 2012, ABC borrowed $4,000 from American National Bank by issuing an interestbearing note payable. This loan is to be repaid in three months (on February 28, 2013), along with interest computed at an annual rate of 9%. The entry made on November 30 to record the borrowing was: Dr Cash 4,000 Cr Notes payable 4,000 On February 28, 2013 ABC must pay the bank the amount borrowed plus interest. Assume the beginning balance for Notes Payable is correct. Interest through 12/31/12 must be accrued on the$4,000 note. 6 ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at yearend. A physical count was taken on December 31, 2012, and the inventory onhand at that time totaled $1,100. Record the 2012 Cost of Goods Sold and the 12/31/12 Inventory adjustment. (This includes closing Purchases.) 7 It would be unusual for a company to have an asset impairment in Year 1, but for the sake of this example, ABC realized that their intangible asset might be impaired on December 31, 2012. Record the impairment if any. The expected future net cash flows for this intangible asset totals $20,000, and the fair value of the asset is $21,000. Do this step after preparing the Income Statement except for the Income taxes line: 8 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 return's March 15, 2013 due date. ABC's income tax rate is 35%. The entire year's income tax expense was estimated at the beginning of 2012 to be $24,000, so January through November income tax expense recognized amounts to $22,000 (11/12 months). Since we are assuming estimates are not made during the year, the balance in Income taxes payable represents tax accrued for January through November. Assume no deferred tax assets or deferred tax liabilities. Based on the income before income taxes figure from the income statement, record December's income tax expense so that the entire year's tax expense is correct. Adjusting Journal Entries 12/31/12 JE # 1 2 3 4 5 6 7 8 Account Titles Debits Credits Beginning balances (bb) on these Taccounts are the 12/31/12 unadjusted balances. Hint: If there is no beginning balance (bb), it is a new account. bb Cash 39,640 bb 39,640 bb Accounts receivable 6,500 bb 6,500 36,000 bb bb 1,250 Notes payable 4,000 Income taxes payable 22,000 bb bb 800 Accumulated depreciation: building 1,250 Building 36,000 Inventory 800 Purchases 1,000 1,000 bb bb 4,000 Unearned rent revenue 9,000 Capital stock bb Prepaid insurance 4,500 bb 4,500 Accumulated depreciation: equipment 4,000 Equipment 12,000 12,000 bb bb 80,000 Land 52,000 52,000 Patent 30,000 Accounts payable 2,690 30,000 2,690 Retained earnings bb - bb bb Dividends 14,000 4,000 22,000 Sales Revenue 201,250 bb bb 3,900 201,250 bb Insurance expense 13,500 13,500 Cost of goods sold - Advertising expense 3,900 bb Income taxes expense 22,000 22,000 Loss on Impairment - 9,000 bb Wages expense 56,800 80,000 bb 56,800 Office expense 6,900 bb 6,900 Rent revenue earned - Depreciation expense 5,250 5,250 Wages payable Interest expense - 14,000 - - bb Utilities expense 19,400 19,400 Interest payable - bb ABC Corporation Adjusted Trial Balance December 31, 2012 ABC Corporation Income Statement For the Year Ended December 31, 2012 Gross profit Operating expenses: Other income and loss: Income before income taxes Income taxes Net income ABC Corporation Income Statement For the Year Ended December 31, 2012 Retained earnings, January 1, 2012 Add: Net income Subtotal Less: Dividends Retained earnings, December 31, 2012 ABC Corporation Income Statement For the Year Ended December 31, 2012 ASSETS CURRENT ASSETS: Total current assets PROPERTY, PLANT & EQUIPMENT: Total property, plant & equipment INTANGIBLE ASSETS: Total intangible assets TOTAL ASSETS LIABILITIES & STOCKHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES: Total current liabilities TOTAL LIABILITIES STOCKHOLDERS' EQUITY TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITES & STOCKHOLDERS' EQUITY Closing Entries 12/31/12 JE # 9 10 11 12 Account Titles Debits Credits Beginning balances (bb) on these Taccounts are the 12/31/12 unadjusted balances. Hint: If there is no beginning balance (bb), it is a new account. bb Cash 39,640 bb 39,640 bb A ccounts receivable 6,500 6,500 36,000 Income taxes payable 22,000 4,000 Sales Revenue 201,250 Insurance expense 13,500 13,500 Cost of goods sold - bb bb bb A dvertising expense 3,900 3,900 bb bb Income taxes expense 22,000 - Prepaid insurance 4,500 12,000 Capital stock bb 80,000 9,000 bb bb bb 4,000 Unearned rent revenue 9,000 bb Wages expense 56,800 56,800 Office expense 6,900 - Income Summary - Hint: Should be ZERO balance!!! A ccounts payable 2,690 2,690 - bb bb - Depreciation expense 5,250 Interest expense - 52,000 Retained earnings bb 5,250 Wages payable Land 52,000 30,000 bb 6,900 Rent revenue earned bb Patent 30,000 80,000 bb bb 4,500 Accumulated depreciation: equipment 4,000 22,000 Loss on impairment Purchases 1,000 1,000 Equipment 12,000 22,000 201,250 bb bb 1,250 4,000 bb Inventory 800 800 Accumulated depreciation: building 1,250 Building 36,000 Notes payable bb - Dividends 14,000 14,000 bb Utilities expense 19,400 19,400 Interest payable - bb ABC Corporation Trial Balance December 31, 2012 $ $