The Smith brothers started its software company on Jan. 1, 2017, Assume that Smith has an annual accounting cycle from Jan. 1 to Dec. 31 and adjusting entries are prepared on Dec. 31 each year. The following transactions took place during fiscal 2017 (Jan. 1 to Dec. 31, 2017) 1. Jan. 1: Smith issued $65,000 of common stock 2. Jan. 1: Smith paid $12,500 cash to purchase equipment. The equipment has an estimated useful life of 5 years and an estimated salvage value of $2,500. Jan. 1: Smith paid $3,600 cash for three years of insurance coverage starting on Jan. 1, 2017. 4. Feb 1: Smith purchased $7,500 of inventory on account. 5. Mar. 1: Smith rented a building and paid $4,800 for one year's rent (starting 3/1) 6. June 1: Smith sold $25,000 of software on account. The cost is $5,000 7. July. 1: Smith paid $6,000 cash to suppliers for inventory purchases made on account. 3. 9. Sep. 30: Smith paid $4,500 cash for employce wages earned during the first nine months (Jan 1 to Sep 10. Nov. 1: Smith started an on-line service where customers pay an annual subscription fee when they Aug. 1: Smith collected $14,000 cash from its customers for the previous sales on account. 30, $500 per month). sign up for a 12-month service plan. On Nov. 1, Smith received $6,300 of cash from customers for one year of subscription fees (for online services from Nov. 1, 2017 to Oct. 31, 2018) Additional information: Smith uses the straight-line depreciation method. Three months of employee wages was accrued on Dec. 31. Smith plans to pay their employees on Jan 1, 2018 Do not forget to do other necessary adjusting entries. The adjusting entries are REQUIRED in the FSET, Journal Entries and T-accounts. (Hint: There are five adjusting entries in total.) e Required: 1. Complete the 3-step process discussed in class (see LN1) Use the FSET template posted on Canvas to record the transactions and adjusting entries for fiscal 2017. Record the journal entries, including adjusting entries and closing entries. Post all entries to the corresponding T-accounts (use the template posted on Canvas). a. b. c. Prepare a Balance Sheet and an Income Statement for fiscal 2017. Don't forget to do closing entries before you prepare the financial statements 2