As the accountant for Wheatley International, it is your job to prepare the companys income statement and balance sheet. Use the accounts listed below to construct the statements. Assume that the tax rate is 25%. I recommend that you should first go through each account and determine if it is a balance sheet account (i.e., asset, liability, or owners' equity) or income statement account (i.e., revenue, costs of goods sold, expense, or net income). Hint: ending inventory goes on both the balance sheet and income statement; on the income statement, both beginning and ending inventory are used to calculate cost of goods sold.

Accounts Receivable $130,000

Land $1,500,000

Notes Receivable $61,200

Insurance Expenses $59,000

Accounts Payable $50,000

Interest Expenses $24,600

Common Stock $1,914,400

Accumulated Depreciation $450,000

Net Sales $1,275,000

Ending Inventory $126,600

Notes Payable (Long-term) $215,000

Beginning Inventory $154,800

Retained Earnings $1,459,800

Advertising Expense $90,000

Cash $67,000

Salaries Expense $210,000

Short-Term Notes Payable $15,600

Merchandise Purchased (for inventory) $410,800

Buildings $1,200,000

Rent Expense $14,000

Utilities Expense $8,400

Equipment & Vehicles $1,000,000

Goodwill $80,000

Bonds Payable $60,000