On January $1,$ Year $1,$ Jana started a small flower merchandising business that she named Jana's Flowers. The company experienced

the following events during the first year of operation:

Started the business by issuing common stock for $$27,000$ cash.

Paid $$18,000$ cash to purchase inventory.

Sold merchandise that cost $$12,000$ for $$26,000$ on account.

Collected $$23,000$ cash from accounts receivable.

Paid $$5,800$ for operating expenses.

Required:

a$.$ Organize ledger accounts under an accounting equation and record the events in the accounts. In the last column of the table,

provide appropriate account titles for the Retained Earnings amounts.

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 $$26,000,$ she will be able to recover more than half of the $$27,000$ she insed in the stock. Do

you agree with this statement?