The Rateliff Corporation had the following accounting framework available:

			Assets			=			Liabilities			+		Owner's Equity
Cash	A/R	Pre. Exp.	Inventory	Equip.	A/D		A/P		N/P		Unearn. Rev.		Cap.		R/E
3,630	840	390	6,440	0	0		320		1,410		590		7,760		1,220

Required:

1.Using the accounting framework above, record each of the following transactions/events for the month:

May 1	Received $50 from customers on account
May 1	Borrowed $10,000 on a long-term note payable
May 1	Purchased equipment for $7,200, which is expected to be useful for 7 years at which time, it should be worth $900
May 3	Purchased $2,400 of inventory on account
May 8	Paid suppliers $180 for purchases previously made on account
May 10	Paid an insurance premium of $210
May 13	Received and paid utility bill for $600
May 19	Sold 25% of all inventory to a customer for $8,400
May 24	Sold a customer a gift card for $120
May 30	Paid employee salaries of $4,800
May 31	Insurance of $80 expired

2.Use the resulting accounting framework to prepare an income statement, statement of retained earnings and a balance sheet for the company at the end of the month.

3. Record the necessary transaction related to the equipment assuming it was sold for $8,000 on June 1^st of the same year.

Questions:

1. what net income would the company report in its financial statements?

2. what ending retained earnings would the company report in its financial statements?

3. what amount of total assets would the company report in its financial statements?

4.what amount of total liabilities would the company report in its financial statements?

5.When the Rateliff Corporation records the sale of equipment in the accounting framework, the transaction would include a [Select](Loss on Sale/Gain on Sale] of [Select] (8,000/7,200/875) .