1. ABC Inc. commenced operations in 2020. The company's owners invested $1,450,000 of capital in the company on January 1, 2020. 2. Investments that cost $400,000 were sold for $500,000 during the year. 3. Inventory Purchases were $4,500,000 on account. As at December 31st, $650,000 were still owed on these purchases. 4. Salaries Expense for the year was $1,200,000. As at December 31st, 2020 $200,000 of salaries still remained unpaid. 5. Interest Expense amounted to $60,000 during the year. 6. Machinery and Equipment were purchased for $2,000,000 in cash. 7. Depreciation expense of $400,000 was taken on the machinery and equipment. 8. During 2020, the company reported $10,000,000 of sales, all of which were made on credit. 30% of the sales remained uncollected as at December 31, 2020. 9. On December 31st, ABC's management was informed that a client who owed the company $100,000 went bankrupt, and that this amount (which is included in the company's credit sales above) would not be collected. The company had not set up an allowance for doubtful accounts and does not expect bad debts in the future. 10. Income tax expense of $50,000 was accrued for the year and remained unpaid as at December 31, 2020. 11. The owners of the company declared a dividend of $30,000 on December 31st, 2020. The dividend was paid on January 3rd, 2021 Required: Required: a. For each of the above items show the underlying journal entries that were involved (dates and explanations are not necessary). (12.5 marks) b. For each account indicate if there is an effect on operating income (OI), current ratio (CR), and/or retained earnings (RE) at December 31, 2020. If an account is in multiple journal entries, you do not need to repeat this requirement after the first time it appears. (9.5 marks) Example: Company purchased supplies by paying $5,000 cash. If you believe the increase in supplies affects both retained earnings and operating income and the decrease in cash affects current ratio only, then answer: Supplies (RE, OI) 5,000 Cash (CR) 5,000