GROUP ASSIGNMENT Top Quality Appliance -Long Beach has just purchased a franchise from Top Quality Appliance (TQA). TQA is a manufacturer of kitchen appliances. TQA markets its products via retail stores that are operated as franchises. As a TQA franchisee, Top Quality Appliance -Long Beach will receive many benefits, including having the exclusive right to sell TQA brand appliances in Long Beach. TQA appliances have an excellent reputation and the TQA name and logo are readily recognized by consumers. TQA also manages national television advertising campaigns that benefit the franchisees. In exchange for these benefits, Top Quality Appliance -Long Beach will pay an annual franchise fee to TQA based on a percentage of sales. The annual franchise fee is a separate cost and in addition to the purchase of the franchise. In addition to purchasing the franchise, Top Quality Appliance-Long Beach will also purchase land with an existing building to use for its retail store, store fixtures, and office equipment. The business will purchase appliances from TQA and resell them in its store, primarily to local building contractors for installation in new homes. Top Quality Appliance-Long Beach uses a perpetual inventory system (FIFO with a cost flow method). As a new business, all beginning balances are $0. Top Quality Appliance Long Beach Chart of Accounts Cash Accounts Receivable Baker, Capital Baker, Withdrawals Sales Revenue Allowance for Bad Debts Interest Revenue Cost of Goods Sold Merchandise Inventory Office Supplies Prepaid Insurance Interest Receivable Notes Receivable Land Building Accumulated Depreciation Building Store Fixtures Accumulated Depreciation Store Fixtures Office Equipment Accumulated Depreciation-Office Equipment Franchise Franchise Fee Expense Salaries Expense Utilities Expense Insurance Expense Supplies Expense Bad Debt Expense Bank Expense Credit Card Expense Depreciation Expense-Building Depreciation Expense-Store Fixtures Depreciation Expense-Office Equipment Amortization Expense-Franchise Interest Expense Accounts Payable Interest Payable Notes Payable 5. Prepare a multi-step income statement and statement of owner's equity for the year ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume Interest Receivable is a current asset and Interest Payable is a current liability