nm Sta tement Greatest Accounting Problem Scott Corporation, a furniture store, was formed on January 1, 2007 when they issued no-par common stock for $300,000 Early in January, Scott made the following cash (check) transactions:nt of cah a $150,000 for Equipment b $120,000 for inventory (1,000 pieces of furniture) C $20,000 for 2007 rent on a store building In February, Scott purchased 2,000 units of furniture inventory on account from a foreign company Cost of this inventory was $260,000. Before year end, Scott paid $208,000 of this amount. Scott uses the FIFO method to account for inventory. During 2007 Scott sold 2,500 units of inventory for $200 each. Before year end Scott collected 80% of this amount. The store employs 3 people. The combined annual payroll is $95,000 of which Scott owes $4,000 at year end. At the end of the year Scott paid income tax of $10,000 Late in 2007, Scott declared and paid cash dividends of $11.000 For equipment, Scott uses the straight line depreciation over 5 years with no salvage value. Prepare the Income Statement, Statement of Retained Earnings, Balance Sheet and Statement of Cash Flows for 2007 at Dec 31, 2007