Start by inserting the beginning balances in the T-accounts from the Year 0 Balance Sheet and then post your journal entries from the General Journal. Next, calculate the ending balance in each account. Then, prepare Year 1 financial statements based on the ending balances in each T-account. Finally, go back to the General Journal and prepare closing entries. Post your closing entries to the General Ledger T-accounts. Finally, prepare a Post-Closing Trial Balance.

Adomain Income Statement
for Year ended December 31, Year 0
Revenues
Sales Revenue	$146,500
Expenses
Cost of Goods Sold	(62,500)
R & D Expense	(9,100)
Sales Commissions	(3,000)
Marketing Expense	(9,000)
Rent Expense	(5,700)
Other Operating Expenses	(23,000)
Income from Operations	$34,200
Interest Income	400
Income before Taxes	34,600
Income Tax Expense	(8,500)
Net Income	26,100

Adomain Balance Sheet
As of December 31, Year 0
Assets
Cash	$80,000
Marketable Securities	6,700
Accounts Receivable	20,000
Inventory	25,000
PP&E (net)	34,700
Intangible Assets	10,500
Other Long-Term Assets	15,000
Total Assets	$191,900
Liabilities & Equity
Accounts Payable	$45,000
Notes Payable*	28,500
Unearned Revenue	50,000
Income Tax Payable	4,300
Common Stock	45,000
Retained Earnings	19,100
Total Liabilities & Equity	$191,900
*Assume these notes represent non-interest-bearing loans from owners, due in 5 years .

Post-Closing Trial Balance DR CR Total Year 1 Transactions for Adomain Transaction # Date 1 January 1 2 March 31 3 April 1 4 April 1 5 April 1 6 April 5 7 May 1 8 May 1 9 June 30 10 July 31 11 July 31 12a Sept 30 12b October 1 13 October 1 14 October 1 15 Dec 1 16 Dec 31 17 Dec 31 18 Dec 31 19 Dec 31 20 Dec 31 Event Purchased a patent for $27,000 in cash Prepaid $36,000 for rent for the next 12 months and recorded the transaction as an asset. Paid $20,500 in cash for long-term assets Issued 1000 common shares to investors for $50,000 Sold inventory on account for $137,000 (a). The cost of the inventory was $20,000 (b). Also, paid a sales commission on this sale of $12,000 c. Paid $15,400 in cash for costs related to research and development of new products. Received $24,000 in cash in advance for services. The services will be provided over the course of 6 months beginning on Nov 1 of this year. Received the cash to settle $72,000 of the receivables recorded on April 1. Paid last year's income tax liability. Received $25,000 in cash relating to the Accounts Receivable in transaction 5. Purchased inventory for $20,000. Paid $4,500 in cash and recorded an Accounts Payable for the remaining balance. Purchased supplies for $7,000 in cash. The accountant accidentally recorded the supplies in the PP&E (net) account. The accountant recorded an adjustment to correct the entry made in 12a (so that the accounts will reflect what should have been recorded ). Purchased marketable securities for $7,000 in cash. Borrowed $30,000 from a local bank and signed a 3-year note payable promising to pay 10% interest per year (interest is due and recorded on Dec 31). Employee salaries earned amounted to $39,000. The company paid $7,000 on Dec 1 and the remainder will be paid on Jan 1, Year 2. Income Tax for Year 1 is $7,500. $4,500 is paid this year and the remainder will be paid on June 30 of Year 2. Record the appropriate adjusting entry related to transaction 2. Record the appropriate adjusting entry related to transaction 7. $1000 of supplies are still on hand on Dec 31. Record the appropriate adjusting entry to reflect the supplies used during the year. (Refer to transaction 12.) Record the appropriate adjusting entry related to the note payable described in transaction 14 (assuming interest will be paid in Year 2). Cash PP&E (net) Interest Payablc Salaries Expense BB BB BB BB EB EB Intangible Assets Common Stock Marketing Expense BB BB BB EB EB JEB EB Marketable Securities BB Other LT Assets Retained Earings Service Revenue BB BB BB EB Accounts Receivable BB Accounts Payable Sales Revenue Rent Expense BB BB BB EB EB EB Inventory BB Notes Payable Cost of Goods Sold Supplies Expense BB BB BB EB EB EB Prepaid Rent BB Uneamed Revenue Sales Commissions Interest Expense BB BB BB EB EB EB Supplies BB Income Tax Payable R&D Expense D Income Tax Expense BB BB BB EB EB Salaries Payable BB EB Adomain Income Statement For the year ended December 31, Year 1 Revenues Expenses Income from Operations Income before Taxes Net Income General Journal Please do NOT ADD or DELETE rows! If you need multiple entries for one transaction. skip a row between entries. Transaction # Date Account Title Description Debit Credit 2 3 4 Sa 5b 5c 6 7 8 9 10 11 12 a Page 1 12b Adomain Balance Sheet As of December 31, Year 1 : Assets . 0 1 2 3 4 Total Assets 5 5 Liabilities & Equity 7 3 3 1 2 3 4 5 Total Liabilities & Equity 5 0