I need help completing A, B and C please Instructions (You may want to set up T

Question

I need help completing A, B and C please

Instructions
(You may want to set up T accounts to determine ending balances.)

(a) Prepare journal entries for the transactions listed above and adjusting entries.

(b) Prepare an adjusted trial balance at December 31, 2010.
Totals $646,995

(C) you need to prepare all necessary Closing Entries.


Use the following information to complete A, B and C above.


Aber Corporation's balance sheet at December 31, 2009, is presented below.

ABER CORPORATION
Balance Sheet
December 31, 2009
Cash $30,500 Accounts payable $13,750
Inventory 25,750 Bond interest payable 3,000
Prepaid insurance 5,600 Bonds payable 50,000
Equipment 38,000 Common stock 20,000
$99,850 Retained earnings $13,100
$99,850



During 2010, the following transactions occurred.

1. Aber paid $3,000 interest on the bonds on January 1, 2010.

2. Aber purchased $241,100 of inventory on account.

3. Aber sold for $450,000 cash inventory which cost $250,000. Aber also collected $27,000 sales taxes.

4. Aber paid $230,000 on accounts payable.

5. Aber paid $3,000 interest on the bonds on July 1, 2010.

6. The prepaid insurance ($5,600) expired on July 31.

7. On August 1, Aber paid $10,200 for insurance coverage from August 1, 2010, through July 31, 2011.

8. Aber paid $17,000 sales taxes to the state.

9. Paid other operating expenses, $91,000.

10. Retired the bonds on December 31, 2010, by paying $48,000 plus $3,000 interest.

11. Issued $90,000 of 8% bonds on December 31, 2010, at 104. The bonds pay interest every June 30 and December 31.





Adjustment data:

1. Recorded the insurance expired from item 7.

2. The equipment was acquired on December 31, 2009, and will be depreciated on a straight-line basis over 5 years with a $3,000 salvage value.

3. The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.)

Explanation / Answer

interest expenses $3,000          cash $3,000 Inventory $241,100        Accounts payable $241,100 cash $450,000        sales $450,000 cost of goods sold $250,000         inventory $250,000 Accounts payable $230,000         cash $230,000 interest expenses $3,000       cash $3,000 insurance expenses $5,600         prepaid insurance $5,600 insurance expenses $10,200        prepaid insurance $10,200 sales tax expenses $17,000        cash $17,000 operating expenses $91,000        cash $91,000 Bonds payable $48,000 interest on bonds $3,000         cash $51,000 cash $93,600         Bonds payble $90,000         premium on bonds payable $3,600 inssurance expenses $4,250         prepaid insurance $4,250 Depreciation expenses $7,000        Accumulated deprecition $7,000

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