Year 1 Year 2 Sephfem Inc Exercise Sephfem Inc engages in the following transactions: 1,000 400 Issues common shares Borrows Repays loan Pays interest 100 18 24 Buys property and plant (estimated useful life is 10 years) 900 Buys inventory Cash paid for inventory 350 320 400 380 Sells inventory Cash received from sales 510 430 550 480 Inventory left at year end 60 80 40 50 Pays expenses Pays tax at 30% Pays a dividend 30 5 Requirements: 1. Produce a balance sheet and income statement for Sephfem Inc for Years 1 and 2. 2. Produce the financial statements for Year 2