1. Salleys Apparel shop generated the following sales during the year:

i. Sold 600 shirts @ $25 per shirt

ii. Sold 630 dresses @ 85 per dress

iii. Sold 120 pairs of shoes @ $22 per pair

On January 1, 2010, total merchandise on hand was $42,000. During the year, Salley made the following purchases:

iv. March 21,2010 $15,000.00

v. May 31, 2010 $26,528.00

vi. November 12, 2010 $10,000.00

When a total count was taken on December 31, 2010, it was determined that $20,000 of merchandise was still on hand. What was Salleys gross profit/loss as of December 31, 2010?

2. Using the information above and the account information below, prepare the asset section of the Balance Sheet for Salleys Apparel Shop. Assume the following account balances as of December 31, 2010:

Accounts Payable $15,000.00

Unearned Revenue $5,896.00

Cash $95,000.00

Supplies $1,540.00

Merchandise Inventory $xxx

Prepaid Insurance $5,000.00

Wages Expense $3,000.00

Building $45,000.00