At fiscal year-end, time period 10, Denver Clothing Retail, Inc. had $49,000 long-term debt, $30,000 cash, $3,000 short-term debt, $45,000 in inventory, $30,000 accounts payable, $30,000 accounts receivable, and $75,000 Property Plant and Equipment.

For the fiscal year time period 11, the company had $500,000 in sales. The cost of the clothing sold was $300,000 and the selling, general, and administrative expense was $100,000.

For simplification, there was no depreciation expense. The $49,000 and $3,000 debt stayed the same all year. The company keeps its cash in a non-interest bearing checking account. The annual interest rate was 5% for both loans. The income tax rate was 30%. The company did not pay a dividend.

As of fiscal year-end 11, inventory equaled $50,000. On the last day of fiscal year 11, the company issued $50,000 of equity. The new investor is the brother of the owner. The company also obtained a $100,000 mortgage loan on the last day of fiscal year 11. No interest was paid during the fiscal year on this loan because the loan was obtained on the last day of the fiscal year. The funds that were raised ($150,000) were used in the following manner: all suppliers were paid off ($0 balance due for every supplier) and a second store location was purchased for $120,000. The location was purchased on the last day of the fiscal year.

Assume there are no other changes.

Develop the three following statements: 1) Balance Sheet at the end of year 10; 2) Balance Sheet at the end of year 11; 3) Fiscal Year 11 Income Statement.

All the major classification categories/terminology (e.g., current assets, gross profit) should be used.

PLEASE BE DETAILED ON EACH STEP AND HOW YOU CAME TO THE ADJUSTMENTS.