1. I purchased a piece of equipment at a cost of $5,000, but it had a value of $7,000. I paid $3,000 up front and the rest was on an account. How much do I record on the balance sheet for equipment?

2. ABC Company earned revenues of $35,000, but only received $20,000 in cash. They incurred $15,000 in expenses, but only paid $7,000 in cash. How much Net Income did they have for the period?

Can you give me correct answer and calculation process