Vivaldi Company is a retailer. During the year X1 it carried out the following transactions (all expressed in CU, except where clearly marked):

Creation of the business and provision by shareholders of tangible assets in the amount of 40 and of cash for 60.

Purchase of merchandise for resale: 40 (on account).

Advertising expense: 7 (on account).

Sale of merchandise to customers (on account): 120. The purchase price of the merchandise that was sold is 30.

Personnel expenses for the period: salaries 30 (for the payment, see question (I)), social charges and fringe benefits 15 (to be paid out in cash during the next period).

Miscellaneous business taxes: 20 (will be paid in cash during the next period).

Cash received from customers (who had bought on account): 60.

Payment to the merchandise suppliers: 35.

Payment of salaries: 30.

The assets brought as a capital contribution when the business was created are expected to have a useful life of ten years. The loss of value of the asset is expected to be the same each year for ten years.

The purchase value of the merchandise on hand at the end of the year (ending inventory) is 10.

Required

Show the impact of each event on the basic business equation (recording the purchase of merchandise in expenses).

Prepare the year-end balance sheet reflecting the events listed in A to K above.

Prepare the income statement for the period reflecting the events listed in A to K above.

Required Record the transactions in the appropriate accounts.