Transaction Analysis and Financial Statements, Including Dividends. Consider the following balance sheet of a wholesaler of party supplies:

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Funco Supplies Company Balance Sheet December 31, 20X7 Assets Liabilities and Stockholders' Equity Liabilities. Cash $ 340,000 Accounts payable $ 800,000 Accounts receivable 400,000 Stockholders' equity Merchandise inventory 860,000 Paid-in capital $300,000 Prepaid rent 40,000 Retained earnings 640,000 Equipment 100,000 Total stockholders' equity Total $1,740,000 Total 940,000 $1,740,000 The following is a summary of transactions that occurred during 20X8:1 a. Acquisitions of inventory on open account, $1 million. b. Sales on open account, $1.5 million; and for cash, $200,000. Therefore, total sales were $1.7 million. c. Merchandise carried in inventory at a cost of $1.25 million was sold as described in b. d. The warehouse 12-month lease expired on September 1, 20X8. However, the company immedi- ately renewed the lease at a rate of $84,000 for the next 12-month period. The entire rent was paid in cash in advance. e. Depreciation expense for 20X8 for the warehouse equipment was $20,000. f. Collections on accounts receivable, $1.25 million. g. Wages for 20X8 were paid in full in cash, $200,000. h. Miscellaneous expenses for 20X8 were paid in full in cash, $70,000. i. Payments on accounts payable, $900,000. j. Cash dividends for 20X8 were declared and paid in full in December, $100,000. Required 1. Prepare an analysis of transactions, employing the equation approach demonstrated in Exhibit 2-3 (p. 56). Show the amounts in thousands of dollars. 2. Prepare a balance sheet, statement of income, and statement of retained earnings. Also prepare a combined statement of income and retained earnings.