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.

Year 1 Transactions for Adomain
Transaction #	Date	Event
1	January 1	Purchased a patent for $27,000 in cash
2	March 31	Prepaid $36,000 for rent for the next 12 months and recorded the transaction as an asset.
3	April 1	Paid $20,500 in cash for long-term assets
4	April 1	Issued 1000 common shares to investors for $50,000
5	April 1	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).
6	April 5	Paid $15,400 in cash for costs related to research and development of new products.
7	May 1	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.
8	May 1	Received the cash to settle $72,000 of the receivables recorded on April 1.
9	June 30	Paid last year's income tax liability.
10	July 31	Received $25,000 in cash relating to the Accounts Receivable in transaction 5.
11	July 31	Purchased inventory for $20,000. Paid $4,500 in cash and recorded an Accounts Payable for the remaining balance.
12a	Sept 30	Purchased supplies for $7,000 in cash. The accountant accidentally recorded the supplies in the PP&E (net) account.
12b	October 1	The accountant recorded an adjustment to correct the entry made in 12a (so that the accounts will reflect what should have been recorded ).
13	October 1	Purchased marketable securities for $7,000 in cash.
14	October 1	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).
15	Dec 1	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.
16	Dec 31	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.
17	Dec 31	Record the appropriate adjusting entry related to transaction 2.
18	Dec 31	Record the appropriate adjusting entry related to transaction 7.
19	Dec 31	$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.)
20	Dec 31	Record the appropriate adjusting entry related to the note payable described in transaction 14 (assuming interest will be paid in Year 2).

Adomain Income Statement for Year ended December 31, Year 0 Revenues Sales Revenue $146,500 Expenses Cost of Goods Sold R & D Expense Sales Commissions Marketing Expense Rent Expense Other Operating Expenses Income from Operations (62,500) (9,100) (3,000) (9,000) (5,700) (23,000) $34,200 Interest Income 400 Income before Taxes Income Tax Expense Net Income 34,600 (8,500) 26,100 Adomain Balance Sheet As of December 31, Year 0 Assets Cash $80,000 6,700 Marketable Securities Accounts Receivable 20,000 Inventory 25,000 PP&E (net) 34,700 Intangible Assets 10,500 Other Long-Term Assets 15,000 2 Total Assets $191,900 B 1 Liabilities & Equity 5 Accounts Payable $45,000 5 Notes Payable* 28,500 7 Unearned Revenue 50,000 B Income Tax Payable 4,300 Common Stock 45,000 Retained Earnings 19,100 1 Total Liabilities & Equity $191,900 2 3 "Assume these notes represent non-interest-bearing loans from owners, due in 5 years. Adomain Income Statement for Year ended December 31, Year 0 Revenues Sales Revenue $146,500 Expenses Cost of Goods Sold R & D Expense Sales Commissions Marketing Expense Rent Expense Other Operating Expenses Income from Operations (62,500) (9,100) (3,000) (9,000) (5,700) (23,000) $34,200 Interest Income 400 Income before Taxes Income Tax Expense Net Income 34,600 (8,500) 26,100 Adomain Balance Sheet As of December 31, Year 0 Assets Cash $80,000 6,700 Marketable Securities Accounts Receivable 20,000 Inventory 25,000 PP&E (net) 34,700 Intangible Assets 10,500 Other Long-Term Assets 15,000 2 Total Assets $191,900 B 1 Liabilities & Equity 5 Accounts Payable $45,000 5 Notes Payable* 28,500 7 Unearned Revenue 50,000 B Income Tax Payable 4,300 Common Stock 45,000 Retained Earnings 19,100 1 Total Liabilities & Equity $191,900 2 3 "Assume these notes represent non-interest-bearing loans from owners, due in 5 years