The following list summarizes the transactions that took place during a start ups first year of operations. Using the information below, prepare a list of the appropriate journal entries, including any necessary adjusting entries, and create a Balance Sheet and Income Statement. Once you have created the financial statements, provide the appropriate closing entries. The startup uses straight line when depreciating longterm assets and a perpetual inventory system.

Transactions and information for the year:

1. Jan 1st, issued 500 shares of common stock ($0.50 par value) for $5000.

2. Feb 1st, paid $2500 to purchase land.

3. Feb 28th, issued 100 shares of preferred stock ($100 par value) for $20,000.

4. June 30th, paid $75,000 for a building (estimated useful life of 40 years; salvage

   value = $5,000) by signing a 5 year Note Payable, promising to pay 5% interest at

   the end of each of those 5 years (i.e. on June 30th of each year).

5. July 1st, purchased 400 units of inventory at $15 each. $1,000 was paid in cash, the

   rest was on account.

6. July 30th, sold 120 units of inventory for $63 each on account.

7. Aug 2nd, incurred $450 of wages expense.

8. Aug 5th, collected $2500 of accounts receivable.

9. Aug 31st, paid $200 of wages payable.

10. Sept 4th, paid $1600 of accounts payable.

11. Dec 31st, incurred and paid $2,000 of utilities expense.

12. Dec 31st, Purchased a patent for $20,000. The patent has a 20year useful life and no

    residual value.

13. Estimated tax rate is 35%.