On January 1, 2018, Jana started a small flower merchandising business that she named Janas Flowers. The company experienced the following events during the first year of operation:

1.Started the business by issuing common stock for $30,000 cash.

2. Paid $19,000 cash to purchase inventory.

3. Sold merchandise that cost $10,000 for $21,000 on account.

4. Collected $16,000 cash from accounts receivable.

5. Paid $3,750 for operating expenses.

Required

a. Organize ledger accounts under an accounting equation and record the events in the accounts.

b-1. Prepare an income statement.

b-2. Prepare a balance sheet.

b-3.Prepare a statement of cash flows.

c. Since Jana sold inventory for $21,000, she will be able to recover more than half of the $30,000 she invested in the stock. Do you agree with this statement?