Use the accounting equation to analyze the effects of the following events. Assume that the beginning balances are zero. Prepare an income statement and balance sheet after recording each transaction.

a. Sugar Loaf Enterprises bought inventory for resale at a cost of $350,000 on account.

b. Half the inventory was sold to customers for $525,000, all on account.

c. Customers paid $200,000 on account.

d. A particularly interested customer paid $10,000 in advance to reserve an especially desirable item.

e. The item was shipped at an invoiced charge of $2,500 more than the deposit.
The inventory cost was $6,000.

f. The customer paid the $2,500 invoice, after reducing the invoice by the $55 freight cost, which, in the customer’s opinion, should have been waived because of the $10,000 advance payment. p-968