The following facts apply to the ABC Company in the year 20XX.

1. Stockholders invest $1,000,000.

2. The company buys land for $20,000 and a building for $380,000 in cash.

3. The company borrows $100,000 from the bank. The five-year note bears 14 percent interest per year.

4. The company purchases $300,000 of merchandise, pays for $200,000 of it, and reflects the remainder as an account payable.

5. Sales of $800,000 are made on account, and there is $50,000 of merchandise remaining at the end of the year. Wages and other expenses for the year are $370,000. Interest of $3,000 is paid on the bank debt. The income is $177,000.

6. Dividends of $100,000 are paid to stockholders.

7. Accounts receivable has an ending balance of $500,000.

Set up T-accounts and record the above transactions. Key all entries. Prepare a balance sheet as of December 31, 20XX, that reflects the foregoing transactions.