The following question has 2 parts. Each part has different set of requirements. Read the requirements carefully.

Part a:

Consider the following account balances of Mark, Inc., as of December 31, Year 3:

Accounts Payable	$	298,500		Retained Earnings		136,750
Equipment		1,054,000		Notes Payable, due Year 5		858,000
Common Stock		500,000		Accounts Receivable		506,250
Income Tax Payable		9,750		Cash		242,750

Required Part a:

• Prepare a classified balance sheet at December 31, Year 3.

There are marks for following the correct structure and format of balance sheet.

Part b: (Not related to part a)

1. Stockholders contribute $25,000 cash to a company in exchange for common stock.
2. The company purchases $12,500 of new equipment in exchange for its promise to pay $12,500 at the end of next month.
3. The company pays $7,500 to suppliers on account.

Required Part b:

• Show the effect of these transactions on the basic accounting equation.
• Prepare the journal entries that would be used to record the transactions.

For drawing tables, use the table function on the textbox, OR attempt your answer on an excel sheet and paste the table in the textbox.