EVENTS AND TRANSACTIONS Several events are listed below.

a. Common stock is issued to investors.

b. An agreement is signed with a janitorial service to provide cleaning services over the next 12 months.

c. Inventory is purchased.

d. A two-year insurance policy is purchased.

e. Inventory is sold to customers.

f. Two investors sell their common stock to another investor.

Required:

For each of the events, identify which ones qualify for recognition in the financial statements. For events that do not qualify for recognition, explain your reasoning.

Cornerstone Exercise