Sage Inc. experienced the following transactions for Year 1, its first year of operations: Issued common stock for $120,000 cash. Purchased $200,000 of merchandise on account. Sold merchandise that cost $154,000 for $306,000 on account. Collected $274,000 cash from accounts receivable. Paid $180,000 on accounts payable. Paid $56,000 of salaries expense for the year. Paid other operating expenses of $72,000. Sage adjusted the accounts using the following information from an accounts receivable aging schedule: Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance Current $ 19,200 0.01 030 8,000 0.05 3160 1,600 0.10 6190 1,600 0.20 Over 90 days 1,600 0.50 b. Prepare the income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows for Sage Inc. for Year 1.

Required information [The following information applies to the questions displayed below.) Sage Inc. experienced the following transactions for Year 1, its first year of operations: 1. Issued common stock for $120,000 cash. 2. Purchased $200,000 of merchandise on account. 3. Sold merchandise that cost $154,000 for $306,000 on account. 4. Collected $274,000 cash from accounts receivable. 5. Paid $180,000 on accounts payable. 6. Paid $56,000 of salaries expense for the year. 7. Paid other operating expenses of $72,000. 8. Sage adjusted the accounts using the following information from an accounts receivable aging schedule: Number of Days Past Due Amount Current $19, 200 0-30 8,000 31-60 1,600 61-90 1,600 Over 90 1,600 days Percent Likely to Be Allowance Uncollectible Balance 0.01 0.05 0.10 0.20 0.50 b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Sage Inc. for Year 1. Complete this question by entering your answers in the tabs below. Required Required Required Required B Inc B Stmt B Bal B Stmt Prepare the statement of changes in stockholders' equity for Sage Inc. for Year 1. SAGE INC. Statement of Changes in Stockholders' Equity For the Year Ended Year 1 Beginning common $ 0 stock Plus: Stock issued 120,000 $ Ending common stock 120,000 Beginning retained $ 0 earnings Plus: Net income Ending retained 0 earnings Total stockholders' $ equity 120,000