ARCHITECTING the Basic Financial Statements Walter Collins, P.E, Esq. invested $60,000 in an architectural firm organized as a sole proprietorship at the beginning of May, borrowing $50,000 from Fort Knox Bank at 6% interest per annum (p.a.), payable monthly. By the end of June 30, 2022, he had the following business transactions (i.e., activities that change the value of a firm's assets, liabilities, or owner's equity): (a) Purchased supplies for cash $1,000, showing it as an asset. (b) Purchased equipment for $60,000, paying $500 cash down, and owing the balance. (c) Paid rent for May and June, and accrued rent for the month of July, $1,200. (d) Paid $30,000 of the amount owed for the equipment. (e) Performed design services, on account, for $40,000, and another $10,000 for cash. (f) Received $2,000 as a refundable deposit that was wrongly shown as unearned revenue. (g) Paid salaries for the month, $3,000, but a further $1,500 needs to be accrued (h) The supplies balance at the end of the month is $750. See (a) above. (i) Prepaid $2,400 professional malpractice insurance coverage on May 1, 2022, and withdrew $6,000 cash for this purpose (the excess cash withdrawn was for personal use). () Received $25,000 as partial payment for services on account (see f above) (k) The equipment has a useful life of 5 years, and depreciation is charged monthly. (1) The PM Insurance Company (PMIC), under a new customer incentive plan, agreed to cover the premium for May & June on a complimentary basis and begin billing from July 1, 2022. Required--

(1) Prepare three basic financial statements, viz., the income statement, the statement of owner's equity, and the balance sheet. (2) What is the cash balance at the end of June 30, 2022? Why is it not equal to the net income? (3) Confirm the fundamental accounting equation: Assets = Liabilities + Owner's Equity