The Brown Company was incorporated on June 1, 20X0. Brown had 30 holders of common stock. Rachael Brown, the president and chief executive officer, held 57% of the shares. The company rented space in chain discount stores and specialized in selling ladies' accessories. Brown's first location was in a store that was part of The Shop Haven in Wichita. The following events occurred during June: (Click the icon to view the events and transactions.) The Brown Company prepared the following accrual-basis income statement and analysis of its transactions for the June. (Click the icon to view the income statement.) (Click the icon to view the transaction analysis.) i More Info - X Brown Company Income Statement - Cash Basis For the Month Ended June 30, 20X0 Operating cash receipts Total operating cash receipts Deduct operating cash disbursements Total operating cash disbursements Net cash inflow (outflow) from operations Choose from any list or enter any number in the input fields and then continue to the next question. a. The company was incorporated. Common stockholders invested $400,000 cash. b. Purchased merchandise inventory for cash, $10,000. c. Purchased merchandise inventory on open account, $50,000. d. Merchandise carried in inventory at a cost of $42,000 was sold for cash for $52,000 and on open account for $73,000, for a grand total of $125,000. Brown (not The Shop Haven) carries and collects these accounts receivable. e. Collection of accounts receivable, $10,000. See transaction (d). f. Payments of accounts payable $23,000. See transaction (c). g. Special display equipment and fixtures were acquired on June 1 for $96,000. Their expected useful life was 60 months. This equipment was removable. Brown paid $10,000 as a down payment and signed a promissory note for $86,000. Also see transaction (k). h. On June 1, Brown signed a rental agreement with The Shop Haven. The agreement called for a flat $1,000 per month, payable quarterly in advance. Therefore, Brown paid $3,000 cash on June 1. i. The rental agreement also called for a payment of 9% of all sales. This payment was in addition to the flat $1,000 per month. In this way, The Shop Haven would share in any success of the venture and be compensated for general services such as cleaning and utilities. This payment was to be made in cash on the last day of each month as soon as the sales for the month had been tabulated. Therefore, Brown made the payment on June 30. j. Employee wages and sales commissions were all paid for in cash. The amount was $30,000. k. Depreciation expense of $1,600 was recognized ($96,000/60 months). See transaction (g). 1. The expiration of an appropriate amount of prepaid rental services was recognized. See transaction (h).