The following transactions apply to Farmer$$s Equipment Sale Corp. For Year $1$:

$1.$ The business was started when Farmer$$s received $$60,000$ from the issue of common stock.

$2.$ Purchased $$160,000$ of merchandise on the account.

$3.$ Sold merchandise for $$220,000$ cash $($not including sales tax$)$ Sales tax of $8$ percent is collected when the merchandise is sold. The merchandise had a cost of $$140,000.$

$4.$ Provided a six$-$month warranty on the merchandise sold. Based on Industry estimates, the warranty claims it would amount to $4$ percent of merchandise sales.

$5.$ Paid the sales tax to the state agency on $$180,000$ of the sales.

$6.$ On September $1,$ Year $1$ borrowed $$40,000$ from the local bank. The note had a $6$ percent interest rate and matures on March $1,$ Year $2.$

$7.$ Paid $$6,600$ for warranty repairs during the year.

$8.$ Paid operating expenses of $$61,000$ for the year.

$9.$ Paid $$145,000$ of accounts payable.

$10.$ Recorded accrued interest at the end of the year.

a$.$ Show the effect of these transactions on the financial statements using a horizontal financial statements model like the following one shown next. Use $+$ for increase, $-$ for decrease, and NA for not affected. In the Statement of Cash Flows column, indicate whether the item is an operating activity $($OA$),$ investing activity $($IA$),$ or financing activity $($FA$).$ The first transaction was recorded as an example.b$.$ Prepare the income statement, balance sheet, and statement of cash flows for the period ended December $31,$ Year $1.$ b$.$ Prepare the income statement, balance sheet, and statement of cash flows for the period ended December $31,$ Year $1.$

c$.$ What is the total amount of current liabilities at December $31,$ Year $1.$