1. January 1: Issued 10,000 shares of common stock for $ 50,000.
2. January 1: Acquired a building costing $35,000, paying $5,000 in cash and borrowing the remaining from bank.
3. During the year :acquired inventory costing $40,000 on account from various suppliers.
4. During the year: sold inventory costing $30,000 for 65,000 on account.
5. During the year: paid employees $15,000 as compensation for services rendered during the year.
6. During the year: collected $45,000 from customers related to sales on account.
7. During the year: Paid merchandise suppliers $28,000 related to purchases on account.
8. Dec. 31: Recognized depreciation on the building of $7,000 for financial reporting depreciation expense for income tax purposes was $10,000
9. Dec. 31: Recognized compensation for service rendered during the last week in Dec. but not paid by yearend of $4,000.
10. Dec.31: Recognized and paid interest on the bank loan in part b of $2,400 for the year.
11. Recognized income taxes on the net effect of the preceding transactions at an income tax rate of 40%. Assume that the firm pays cash immediately for any taxes currently due to the government.