Assume Down, Inc., was organized on May 1 to compete with Despair, Inc.a company that sells de-motivational posters and office products. Down, Inc., encountered the following events during its first month of operations.

1. Received $60,000 cash from the investors who organized Down, Inc.
2. Borrowed $20,000 cash and signed a note due in two years.
3. Ordered equipment costing $16,000.
4. Purchased $9,000 in equipment, paying $2,000 in cash and signing a six-month note for the balance.
5. Received the equipment ordered in (c), paid for half of it, and put the rest on account.

3. Prepare a classified balance sheet at May 31. Include Retained Earnings with a balance of zero.

DOWN.INC Balance Sheet