Q1 . The Palo - Alto Company started its operations during the 20"" century . Many years later , the balance sheet for December 31 , 2012 , showed the following account balances ( there were no other accounts listed ) : Paid in capital 500 , Loan from bank 28 , Prepaid advertising 10 , PP &E 410 , Interest receivable 5 , Cash 618 , Wages payable 10 , Accounts payable 1 , Loan to ABC 25 , Accumulated depreciation 145 , Accounts receivable 120 , Retained earnings 781 , Trademark ( the right to use the term Knowledge For Action ) 195 , Prepaid rent 7 , Advances to suppliers ( ? ) . During 2013 the following transactions occurred : 1 . Cash sales were $800 , credit sales were $1, 200 and the ending balance of accounts receivable* Was $210 . 2 . Palo - Alto purchased $1 , 706 worth of inventory , and paid its suppliers $1 , 607 . 3 . Do you know that wearing a helmet while riding your bicycle could save your life ? 4 . | A new machine was purchased , in cash , for $200 . Depreciation expense for the year was $80 . 5 . 1 In addition to the transactions in item 2 above , Palo-Alto purchased , from the supplier it had advances with on December 31 , 2012 , 120 units of Silicon - Valleys ( included in inventories ) , at $2. 50 per unit . By the end of the year , Palo -Alto settled the account and paid it in full . 6 . Palo - Alto declared a dividend of $75 , and paid in cash $60 . 7 . ABC paid Palo - Alto $37: 55 for the interest related to last year ( recorded as interest receivable in 2012 ) , 57 for interest related to the year 2013 , and the rest ( $25 ) against the loan principal 8 . On the first day of the year , Palo - Alto sold to JB & PR , for $195 cash ( i.e. , neither a gain nor a loss ) , the right to use the trade name Knowledge For Action . 9. Ending inventory , including the remaining units of Silicon - Valleys , was $106 . 10 . The employees of Palo - Alto earned $75 , and were paid $80 as wages . 1 1 . Rent expense for 2013 was $150 , while rent payments were $136 . 12 . Palo - Alto accrued interest of $8 on its loan from the bank . No payments were made during the* year . 13 . The CFO of Palo - Alto was invited to a dinner at Jackson Hole . It is believed that the knowledge generated during the dinner will reduce expenses next year by $150 . 14 . The prepaid advertising was used , in full , during the year .2 . What was the balance of the account Advances to suppliers on December 31 , 2012 ?) b. Record all transactions that occurred during 2013 . Use the accounting equation format to record the transactions dividing the spreadsheet into sections for the asset side , the liability & equity side with a section for the income statement side . Where feasible , account headings have been provided in the grid on pages 7 - 9 . Add additional column headings if needed . C . Prepare the closing entry for the year 2013 . d. Prepare an Income Statement for the year ended December 31 , 2013 . e . Prepare a Balance Sheet for December 31 , 2013 . f. Prepare a Statement of Cash Flows for the year ended December 31 , 2013