The Whitmyer Corporation was formed on January 1, 1979, to conduct an office rental business. Listed below are various transactions and other events of the firm during 1979. An index of the general price level at the time of each transaction is also shown.

(1) January 1, \(1979(\mathrm{GPI}=100)\) : Capital stock is issued for \(\$ 1,000,000\).

(2) January 2. \(1979(\mathrm{GPI}=100)\) : Land costing \(\$ 100,000\) and a building costing \(\$ 1,500,000\) are acquired. A cash payment of \(\$ 900,000\) is made, with a long-term, 10-percent mortgage assumed for the remainder of the purchase price

(3) January 2, 1979, to December 1, 1979 (average GPI \(=106\) ): Rentals of \(\$ 300,000\) are collected in cash.

(4) January 2, 1979, to December 31, 1979 (average GPI \(=106\) ): Operating costs incurred evenly over the year total \(\$ 60,000\), of which \(\$ 50,000\) are paid in cash and the remainder are on account. All of these costs expired during 1979 .

(5) January 2, 1979, to December 31, 1979 (average GPI \(=106\) ): Interest costs are accrued monthly on the mortgage payable and were paid on December 31, 1979.

(6) December 31, \(1979(\mathrm{GPI}=110)\) : Depreciation on the building is calculated using the straight-line method, a 30 -year life, and zero salvage value.

(7) December 31, \(1979(\mathrm{GPI}=110)\) : A cash dividend of \(\$ 75,000\) is declared and paid.

a Set up T-accounts as needed and enter the transactions during the year based on the conventional accounting model.

b Prepare a balance sheet as of December 31, 1979, and an income statement and statement of changes in financial position for 1979 using the conventional accounting model c Repeat part

b, but restate the conventional financial statements for changes in general purchasing power. Round conversion factors to two decimal places (for example, \(110 / 106=1.04)\).