Sara Bayer started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Bayer uses the perpetual inventory system.

1. Acquired $50,000 cash from the issue of common stock.

2. Purchased inventory for $22,000 cash.

3. Sold inventory costing $18,000 for $28,000 cash.

Required

a. Record the events in a horizontal financial statements model like the one shown next.

b. Determine the amount of gross margin.

c. What is the amount of total assets at the end of the period?

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Balance Sheet Income Statement Statement of Assets Stk. Equity %3D Cash Flows Cash Inv. Com. Stk. Ret. Earn. Rev. Exp. Net Inc.