Heines Clocks is a retailer of wall, mantle, and grandfather clocks and is located in the Empire Mall in Sioux Falls, South Dakota. Assume that a grandfather clock was sold for $16,500 cash plus 4 percent sales tax. The clock had originally cost Heines $12,500. Assume Heines uses a perpetual inventory system.

1.	Indicate the effects of the amounts for the above transactions. (Enter any decreases to account balances with a minus sign.)

Assets

=

Liabilities

+

Stockholders' Equity

2. Prepare the journal entries related for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

a. Record the sales revenue of $16,500 plus 4 percent sales tax.

b. Record the cost of goods sold of $12,500.