Max started his Merchandising business in the name of Max traders by investing cash $46000 and equipment $14000. During the month the following transactions were occurred:

January 1

Hired a building for office use $2000 per month and paid $4000.

January 2

Merchandise Inventory purchase $32000, Paying $25000 in cash and the balance on account.

January 8

Borrowed $10000 from AB bank on notes payable.

January 12

Merchandising sales on account $52000( Cost $3000)

January 15

Paid salaries $1600 and advertising $1400.

January 17

Purchase supplies for cash $1200.

January 19

Merchandise purchase on account $15000

January 20

Paid $6500 imn the full settlement of Merchandise Inventory purchase on January 2.

January 24

Received cash $50500 for sales made on account and allowed $1500 discount.

January 27

Paid electricity bills $1000.

January 31

Cost of unused supplies $500.

Required:

Show the effects of each of the above transactions on the accounting equation.

Prepare an income statement and a balance sheet.