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

(1) Issues 25,000 shares of \(\$ 10\)-par value common stock for \(\$ 15\) per share in cash.

(2) Acquires land costing \(\$ 25,000\) and a building costing \(\$ 275,000\) by paying \(\$ 50,000\) in cash and signing a note payable to a local bank for the remainder of the purchase price. The note bears interest at 8 percent per year and matures in three years.

(3) Acquires equipment costing \(\$ 125,000\) for cash.

(4) Pays \(\$ 2,800\) to transport the equipment to the office of Whitley Products Corporation.

(5) Pays \(\$ 3,200\) to install and test the equipment.

(6) Pays the one-year premium of \(\$ 12,000\) for property and liability insurance on the building and equipment for coverage beginning May 1.

(7) Agrees to manufacture custom order merchandise for a particular customer beginning in May at a selling price of \(\$ 15,000\). The customer advances \(\$ 1,500\) of the selling price with the order.

(8) Orders raw materials costing \(\$ 60,000\) from various suppliers.

(9) Receives notification from the suppliers that the raw materials ordered in transaction (8) were shipped. The merchandise belongs to the suppliers until received by Whitley Products Corporation.

(10) Receives the raw materials shipped in transaction (9).

(11) Discovers that raw materials costing \(\$ 8,000\) are damaged and returned to the supplier. The firm has not yet paid the supplier.

(12) Pays the raw materials suppliers in transactions (8), (9), (10), and (11) the amounts due, after subtracting 2 percent for prompt payment. The firm treats cash discounts as a reduction in the acquisition cost of the raw materials.

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 Whitley Products Corporation as of April 30.