Morgan Companys balance sheet at December 31, 2016, is presented below. MORGAN COMPANY Balance Sheet December 31, 2016 Cash $30,500 Accounts Payable $12,250 Inventory 30,250 Interest Payable 260 Prepaid Insurance 6,264 Notes Payable 52,000 Equipment 39,060 Owners Capital 41,564 $106,074 $106,074 During January 2017, the following transactions occurred. (Morgan Company uses the perpetual inventory system.) 1. Morgan paid $260 interest on the note payable on January 1, 2017. The note is due December 31, 2018. 2. Morgan purchased $241,000 of inventory on account. 3. Morgan sold for $484,000 cash, inventory which cost $270,000. Morgan also collected $31,460 in sales taxes. 4. Morgan paid $222,000 in accounts payable. 5. Morgan paid $18,000 in sales taxes to the state. 6. Paid other operating expenses of $20,500. 7. On January 31, 2017, the payroll for the month consists of salaries and wages of $58,500. All salaries and wages are subject to 7.65% FICA taxes. A total of $8,600 federal income taxes are withheld. The salaries and wages are paid on February 1. Adjustment data: 8. Interest expense of $260 has been incurred on the notes payable. 9. The insurance for the year 2017 was prepaid on December 31, 2016. 10. The equipment was acquired on December 31, 2016, and will be depreciated on a straight-line basis over 5 years with a $2,880 salvage value. 11. Employers payroll taxes include 7.65% FICA taxes, a 5.4% state unemployment tax, and an 0.8% federal unemployment tax. Collapse question part (a)