T-Account entries and balance sheet preparation. Idaho Products Corporation begins operations on April 1. The firm engages in the following transactions during April:

(1) Issues 20,000 shares of $5-par value common stock for $12 per share in cash.

(2) Issues 500 shares of $100-par value prefened stock at par value for cash.

(3) Gives $40,000 in cash and 5,000 shares of common stock in exchange for land and a building. The land appears at $25,000 and the building at $75,000 on the balance sheet.

(4) Acquires equipment costing $46,000. It makes a cash payment of $8,000 and gives an 8 percent note, due in one year, for the balance.

(5) Pays transportation costs of $1,200 on the equipment in (4).

(6) Pays installation costs of $1,800 on the equipment in (4).

(7) Acquires, on account, merchandise inventory costing $60,000.

(8) Pays license fees of $1,300 in advance for the year beginning May I.

(9) Discovers that merchandise costing $1,900 from the acquisition in (7) is defective and returns it to the supplier for full credit. The tirm has not yet paid this account.

(10) Purchases a patent from the creator for $30,000.

(11) Signs an agreement to manufacture a specially designed machine for a customer for $60,000, with the machine to be delivered in January of next year. At the time of signing, the customer advances $12,000 of the contract price.

(12) Pays invoices totaling $40,000 from the purchases in (7), after deducting a 2 percent discount for prompt payment. The firm treats cash discounts as a reduction in the acquisition cost of inventory.

a. Enter the transactions in T-accounts. Indicate whether each account is an asset, a liability, or a shareholders' equity item. Cross-reference each entry to the appropriate transaction number.

b. Prepare a balance sheet for Idaho Products Corporation as of April 30.