ASSETS as of January 31 Amount Cash Accounts Receivable Merchandise Inventory Prepaid Rent Total Assets LIABILITIES & EQUITY as of January 31 Amount Accounts Payable Sales Commissions Payable Taxes Payable (Owed to the IRS and equal to Tax Expense) Loan Payable Retained Earnings (After-tax Net Income is closed to Retained Earnings) Total Liabilities & EquityTraditional Income Statement for the month of January Amount Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Operating Income before Taxes Tax Expense (35%) Net IncomeCrimson & Blue Bottles buys water bottles with the KU logo on them for $5 each, and resells them on campus for $15 apiece. The following events occurred during the month of January: a. Purchased 100 water bottles with cash, $500. b. Paid cash to have an ad placed in the UDK, $75. C. Paid cash to rent booth space in the Union for January through March, $600. d. Sold 75 water bottles to customers for cash, $1, 125. e. Purchased 200 water bottles on account, $1,000. f. Sold 165 water bottles to the Undergraduate Business Council on account, $2,475. g. Paid cash wages to student hourly workers, $480. h. Crimson & Blue Bottles pays its employees a 10% sales commission for each bottle sold. The commission is paid on the first paycheck following the month of sale. i. Made the monthly loan payment in cash. Crimson & Blue Bottles pays $20 a month in interest and $480 in principle. REQUIRED: 1. Record the events above using the t-accounts on page 2. 2. Determine the ending account balances for each t-account, assuming that the beginning balances were zero, unless otherwise indicated. 3. Prepare an Income Statement for the month of January using the traditional income statement template on page 3. 4. Prepare a Balance Sheet as of January 31 using the template on page 4.BALANCE SHEET Cash Accounts Receivable Merchandise Inventory 1/1 5,000 Prepaid Rent Accounts Payable Sales Commission Payable Loan Payable Retained Earnings 5,000 1/1 INCOME STATEMENT Sales Revenue Cost of Goods Sold Advertising Expense Sales Commission Expense Rent Expense Salaries & Wage Expense Interest Expense