Ho Designs experienced the following events during 2016, its first year of operation:

Ho Designs experienced the following events during 2016, its first year of operation:


1.     Started the business when it acquired $62,000 cash from the issue of common stock.
2.     Paid $21,500 cash to purchase inventory.
3.     Sold inventory costing $11,900 for $27,500 cash.
4.    

Physically counted inventory; had inventory of $7,700 on hand at the end of the accounting period.


Required
a.     Record the events in the T-accounts provided.



b.     Prepare an income statement and balance sheet.