The following transactions occurred during the first year of operations for ABC Company. ABC uses the perpetual system of inventory, and its year-end is December.

1. Started business by issuing 10,000 shares of common stock for $200,000.

2. Issued a purchase order for $45,000 for inventory.

3. Leased a building for three years at $5000 per year and paid two years rent on January 1.

4. Purchased equipment for $90,000 on June 30, paying $10,000 down and signing a two-year, 10% note for the balance. Depreciation expense is $8000.

5. Purchased $180,000 of inventory on account.

6. Cash sales of $70,000 and credit sales of $150,000 for the first year. Cost of inventory sold was $131,000.

7. Paid salaries and wages, $53,000.

8. Paid $160,000 on account for supplies purchased in item (5).

9. Collected $120,000 of the credit sales in item 6.

10. Salaries and wages of $1050 were earned by employees but not paid during year one.

Required:

1. Prepare T-Accounts for the transactions.

2. Record all year end adjusting entries.

3. Calculate ABCs Net Income for year 1.