New West Company recently hired a new accountant whose first task was to prepare the financial statements for the year ended December 31, 2021. The following is what he precuced: NEW WEST COMPANY Income Statement December 31, 2021 Sales Less: Unearted revenue 3395.000 $5,500 3.400 Tataloverus 396.020 6.900 Cost of goods sold Less: Purchase wurns and allowances Net purchases Add: Salcs returns and allowances Cost of goods available for sala Add: Freight out Cost of selling merchandise Gross profit margin Operesing expenses 232,000 4,000 235.000 7,500 243,500 9,500 Insurance expense Interest expense 10,500 2,500 19,000 42,000 77.999 Salaries expense Total operating expenses Profit margin Other reveres Investment by owner Other expenses Depreciation expense Drainings by owner Profit from operators $1,500 J.SVOS,000 7.000 43,000 55,000 (50,000) $5,520 NEW WEST COMPANY Balance Sheet Year Ended December 31, 2021 Assets Cash $16,780 7.300 30,000 24,000 $70,000 50,000 20,000 $53,580 Accounts receivable Merchandise inventory, January 1, 2021 Merchandise inventory, December 3, 202: Equipment Less: Ican payable for equipment purchaga) Total assets Liabilities and Owner's Equity Long-term investment Accumulated depreciation coulpment Sales discounts Totallablitics Owner's aquity Total liabilities and owner's eculty $50,000 21.000 2.900 73,900 $53,580 The owner of the company, Lily Oliver is confused by the statements and has asked you for your help. She doesn't understand how, if her Owner's Capital account was $75,000 at December 31, 2020, owner's equity is now only $24,600. The accountant tells you that $24,660 must be correct because the balance sheet is bianced. The secountant also tells you that he didn't prepare a statement of owner's cculty because it is an optional statement. You are releved to find out that, even though there are errors in the statements, the amounts used from the secounts In the general ledger are the correct amounts. NEW WEST COMPANY Income Statement For the Year Ended December 31, 2021 Sales less T'Sales Discounts Sales Returns and Allowances *** * * dan * * * * * * * ** * * * * * * Prepare the correct statement of owner's equity. (List items that increase owner's equity first.) NEW WEST COMPANY Statement of Owner's Equity xu LLLLLLLLL X LLLLLLLLLLLLLLLL Prepare the correct classified balance sheet. You determine that $5,000 of the loan payable on the equipment must be paid during 2022. (List Current Assets in order of liquidity.) NEW WEST COMPANY Balance Sheet Assets * * * Liabilities and Owner's Equity *