2. The following transactions occurred during the first year of operations for ABC Company. ABC uses...

 

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2. 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 ABC's Net Income for year 1. 2. 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 ABC's Net Income for year 1.