I need an income statement, balance sheet, and statement of stockholders equity and related journal entries for the information below. Thank you!

You do not need to prepare a statement of cash flows

A memo to the owners of Cherry & White Bike Company explaining and justifying the following accounting choices:Accounting for inventory: inventory cost flow methods.

Determine possible alternatives and select a cost flow method for accounting for the racing bike inventory.

Explain why you select the alternative that you use in the financial statements.

Present an analysis of the alternatives.

Show and discuss financial statements effects of the alternative methods and estimates such as change in net income, assets, or liabilities.

Examine the effects of the alternatives on the relevant common financial statement ratios of profitability, liquidity, and solvency.

Prepare the journal entries for all transactions in the general journal.

Cherry & White Bike Company

The Cherry & White Bike Company is a small closely-held company with two owners. Its two owners, Charlotte and George, have decided to expand the business. You are CWBs accountant. Your responsibilities include maintaining all accounting records and preparing annual financial statements. Cherry & White Bikes started on January 2, 2017. CWBs year end is December 31^st.

CWB wants to take out a loan to expand its business in the coming year. The banks and lending institutions require a set of financial statements prepared under U.S. GAAP to evaluate CWBs credit worthiness.

You must prepare a complete set of financial statements including the notes to the financial statements for the period ending December 31, 2017. You need to choose CWBs accounting policies and methods for areas including inventory cost flow, revenue recognition, and depreciation. You will need to consider the proper classification of assets and liabilities as current and non-current on the balance sheet.

To obtain a loan with the lowest interest rate available, CWB company needs to show high profitability, and strong liquidity and solvency. You realize the common financial statement analysis ratios for profitability, solvency and liquidity will depend on the accounting methods you choose. So, you carefully analyze the accounting choices in light of common financial statement ratios.

The owners also have expressed to you that they need to know their inventory and cost of goods sold to manage purchases and pricing. So, you are highly considering using a perpetual inventory system.

You have a trial balance and must add the additional transactions and activities identified below. You can add accounts to the trial balance, as needed. Cherry & White Bikes had the following additional transactions

June 1: The owners hire Lisa Marton to manage the store, paying her a salary of $3,000 a month. Lisa is paid on the 1st of every month, starting on July 1.

July 1: Installed new light fixtures and display cases in the leased store. CWB paid $1,800 for the fixtures, $230 for shipping to the store, and $800 to an electrician to install. The landlord gave CWB permission to remove and dispose of the old fixtures. CWB sold the old fixtures for $110. CWB anticipates being in the store for at least 3 years. CWB cannot take the light fixtures with them if they relocate as they will revert to the lessor.

CWB can take the display cases, which cost $6,400, if they move.

Both the display cases and light-fixtures have a six-year useful life.

August 1: CWB invests $2,000 in an 18-month certificate of deposit paying interest of 1.5%.

November 1: CWB invests in a $1,000 3-month treasury bill paying interest of 1.0%

December 12: One of the standard bikes sold was returned by the customer. The bike sold for $250. CWB paid $80 for it. CWB provided a full refund. CWBs policy is to provide a customer with a full refund within 30 day of purchase as long as the bike is returned in good condition.

December 24: A customer puts down a deposit of $400 on a high-end racing bike that sells for $2,800. CWB ordered the bike from the manufacturer. The manufacturer promises CWB will have the bike at the store on January 3.

December 30: Declared and paid dividends of $500.

Here is other information on activity that occurred during the period.

CWB offers bike tune-ups for $80 each. CWBs employees are experts in adjusting brakes. Below is the number of tune-ups performed in each month. All customers pay in cash. (For recording the transacaitons, you can assume all tune-ups are done the last day of the month).

Month	Number of Tune-Ups
April	12
May	35
June	23
August	11
September	20
October	2
December	4

CWB has the following purchases and sales of racing bikes:

Date	Transaction	Quantity	Cost per Bike	Sales Price per Bike
March 15	Purchase	10	$150
March 25	Purchase	15	$155
April 12	Sale	10		$535
April 13	Purchase	14	$170
May 1	Sale	15		$540
August 20	Purchase	10	$180
September 2	Purchase	12	$190
October 16	Sale	15		$550
October 21	Purchase	14	$200
November 1	Sale	9		$550
December 15	Sale	11		$560

All purchases were made using cash except the October 21^st purchase for which CWB obtained three-months credit from the bike supplier.

The tax rate is 30%.

Chart of Accounts
Group	Account #	Account Title
100: Assets	101	Cash
	102	Accounts receivable
	103	Store supplies
	104	Prepaid rent
	105	Prepaid insurance
	106	Prepaid advertising
	110	Inventory standard bikes
	111	Inventory racing bikes
	112	Inventory childrens bikes
	115	Inventory bike supplies
	120	Equipment
	122	Accumulated depreciation - equipment
200: Liabilities	201	Accounts payable
	205	Utilities payable
	210	Unearned sales revenue
	215	Unearned service revenue
	220	Salaries payable
	225	Taxes payable
	230	Interest payable
	240	Loans payable
300: Equity	301	Capital stock
	310	Retained earnings
	320	Dividends declared
400: Revenues	401	Sales revenue
	405	Sales returns
	410	Service revenue
500: Expenses	500	Cost of goods sold
	505	Cost of bike supplies
	511	Salaries expense
	512	Utilities expense
	513	Selling expense
	514	Administrative expense
	515	Rent expense
	516	Insurance expense
	517	Store supplies expense
	518	Advertising expense
	520	Depreciation expense
	530	Interest expense
	540	Tax expense
600: Other	601	Income summary

Cherry & White Bike COmpany

Trial Balance

Account Title	Debit	Credit
Cash	$27,311
Accounts receivable	0
Store supplies	460
Prepaid rent	7,600
Prepaid insurance	1,560
Prepaid advertising	0
Inventory standard bikes	2,535
Inventory racing bikes	0
Inventory childrens bikes	1,243
Inventory bike supplies	0
Equipment	26,825
Accumulated depreciation - equipment
Accounts payable		$8,724
Utilities payable		875
Unearned sales revenue		0
Unearned service revenue		0
Salaries payable		2,300
Taxes payable		0
Interest payable		1,500
Loans payable		15,000
Capital stock		23,000
Retained earnings
Dividends declared
Sales revenue		47,826
Service revenue
Cost of goods sold	15,300
Cost of bike supplies
Salaries expense	6,800
Utilities expense	2,600
Selling expense	0
Administrative expense	0
Rent expense	3,225
Insurance expense	800
Store supplies expense	466
Advertising expense	1,000
Depreciation expense
Interest expense	1500
Tax expense
Income summary
Totals	$99,225	$99,225