Ho Designs experienced the following events during 2016, its first year of operation:

1.	Started the business when it acquired $54,000 cash from the issue of common stock.
2.	Paid $21,700 cash to purchase inventory.
3.	Sold inventory costing $12,200 for $27,200 cash.
4.	Physically counted inventory; had inventory of $7,500 on hand at the end of the accounting period.

Required

a.	Record the events in the T-accounts provided.

Cash					Common Stock
Beg. Bal.					Beg. Bal.
End. Bal.					End. Bal.
Merchandise Inventory					Sales Revenue
Beg. Bal.					Beg. Bal.
Bal
End. Bal.					End. Bal.
Cost of Goods Sold
Beg. Bal.
End. Bal.

b.	Prepare an income statement and balance sheet.

HO DESIGNS
Income Statement
For the Year Ended December 31, 2016

HO DESIGNS
Balance Sheet
December 31, 2016
Assets
Total assets
Liabilities
Stockholders equity
Total stockholders equity
Total liability and stockholders equity