ABC Incorporated began operations on Jan 1st, 2012 with an initial issuance of 10,000 shares,( each with par value $0.10), for $10 per share
1. On Jan 1st, 2012, the company purchased a two-year fire insurance policy worth $10,000 and had paid it with cash.
2. Company purchased equipment worth $100,000 on Jan 1st by signing a one-year Notes Payable. Interest rate on the loan was 8% and the interest and the entire principal will be paid on Jan 1st 2013. The depreciation on equipment for the year 2012 was $20,000
3. On February 15th, 2012 the company received an advance of $70,000 for some technical services it provided to some companies. By the year end, the company had provided only 80% of the services it had contracted to provide.
4. On November 15th, 2012, the company bought a piece of land for $200,000 by taking a 30-year mortgage loan. The monthly installment is $2,000 is payable on the 1st of each month. The first installment of $2,000 was composed of $1,500 principal payment and $500 interest expense.
5. In 2012, the company purchased (in cash) and used up office supplies worth $20,000.
6. Company purchased Investments worth $20,000 on July 1st 2012. The company usually receives the 10% interest on its Investments annually on June 30th
7. On Feb 15th, 2012, the company bought toys inventory worth $80,000 on credit from its suppliers.
8. On March 20th, 2012, the company sold toys for $180,000. The company received 50% cash and the rest remained on account. The cost of these toys sold was $50,000
9. The company's franchisees owe ABC's $800 in royalties for sales the franchisees made in the last week of December 2012.
10. Utilities expenses for the year 2012 were $10,000 and were paid in cash.
11. Wages accrued in the last week of 2012 were $2,000 and will be paid in the first week of 2013.
12. On December 15th, 2012, the company declared cash dividends of $20,000 which will be paid sometime in 2013.
13. Assume tax rate is 20%
Required: Prepare the journal entries, trial balance, Income Statement, Statement of Stockholders Equity and Balance Sheet for the year ending December 31st 2012.