Classic Motors, Inc., was formed on January 1, 2021. The following transactions occurred during 2021: (Click the icon to view the transactions.) More info Read the requirements. On January 1, 2021, Classic issued its common stock for $350,000. Early in January, Classic made the following cash payments: a. $150,000 for equipment b. $125,000 for inventory (five cars at $25,000 each) c. $25,000 for 2021 rent on a store building In February, Classic purchased six cars for inventory on account. The cost of this inventory was $282,000 ( $47,000 per car). Before year-end, the company paid off $169,200 of this debt. The company uses the first-in, first-out (FIFO) method to account for its inventory. During 2021, Classic sold six autos for a total of $426,000. Before year-end, it had collected 70% of this amount. The business employs three people. The combined annual payroll is $90,000, of which Classic owes $7,000 at year-end. At the end of the year, the company paid income taxes of $14,000. Late in 2021, Classic declared and paid cash dividends of $13,000. For equipment, Classic uses the straight-line depreciation method, over five years, with zero residual value