Ho Designs experienced the following events during Year 1, its first year of operation: 1. Started the business when it acquired $70,000 cash from the issue of common stock. 2. Paid $41,000 cash to purchase inventory. 3. Sold inventory costing $37,500 for $56,200 cash. 4. Physically counted inventory, had inventory of $3,200 on hand at the end of the accounting period. Required a. Record the events in the T-accounts provided. b. Prepare an income statement and balance sheet. Cash Common Stock Beg. Bal Beg. Bal. 1. 70,000 41,000 2 70,000 1. 3a 52,600 End. Bal. 70,000 81,600 End. Bal. Sales Revenue Merchandise Inventory Beg. Bal. Beg. Bal 3,200 35 52,600 3a 2. Bal 41,000 37,800 52,600 End. Bal. 37,800 End. Bal Cost of Goods Sold Beg. Bal. End. Bal. Required A Required B Inc Stmt > Prepare an income statement. HO DESIGNS Income Statement For the Year Ended December 31, Year 1 0 $ 0 Prepare a balance sheet. HO DESIGNS Balance Sheet December 31, Year 1 Assets 0 Total assets Liabilities Stockholders' equity 0 Total stockholders' equity Total liability and stockholders' equity $ 0