The company's 2006transaction are summarized below.
1. Collected $35,000 from it 2005 credit customer. A customer owing $2,500 declared bankruptcy and cannot pay.
2. Paid 2005 taxes.
3. Retired the $20,000 note payable and paid six months interest
4. Purchased and sold the following inventory during the year.
Purchases Sales
100 Units at $25 each
100 units at $20 each 200 units at $210 each
=200 units purchased 200 units sold
All purchases and sales were on account.
5. Paid operating expenses of $22,000.
6. Collected remaining credit sales except $4000
7. Paid all payables from inventory purchases except $1000
8. Recorded 2006 depreciation expense
9. Recorded and paid interest on the %10,000(5%) note.
10. Recorded 2006 tax accrual at a tax rate of 30%
required: prepare a balance sheet, income statement and statement of cash flows for the year.