O OWN Problem 3-2 25 points On January 1, 2021, CMoore started a business The company had the following accounting events during the first year of operation. 1. Started the business by issuing common stock for $175,000 cash. Paid $138,250 cash to purchase inventory. 3 Sold merchandise that cost $70,000 for $157,500 on account Paid $35,000 for operating expenses. Wrote off $10,500 of inventory Collected $140,000 cash from accounts receivable. REQUIRED 1. Record the preceding transactions in the horizontal statements model. 2. Prepare an income statement, a balance sheet, and a statement of cash flows. 3. Since CMoore sold inventory for 157,500 he will be able to recover more than 20% of the $ 175,000 he invested in the stock. Do you agree with this statement? Why or why not? Hint: Think Net Income generated by business activity in the period compared to the original investment $