The transactions relating to the formation of Blue Co. StoresInc., and its first month of operations follow.

1. The firm was organized and the stockholders invested cash of$8,700.
2. The firm borrowed $5,500 from the bank; a short-term note wassigned.
3. Display cases and other store equipment costing $1,750 werepurchased for cash. The original list price of the equipment was$1,940, but a discount was received because the seller was having asale.
4. A store location was rented, and $1,400 was paid for the firstmonth's rent.
5. Inventory of $16,000 was purchased; $8,200 cash was paid to thesuppliers, and the balance will be paid within 45 days.
6. During the first week of operations, merchandise that had cost$3,900 was sold for $5,800 cash.
7. A newspaper ad costing $120 was arranged for; it ran during thesecond week of the store's operations. The ad will be paid for inthe next month.
8. Additional inventory costing $4,250 was purchased; cash of$1,350 was paid, and the balance is due in 30 days.
9. In the last three weeks of the first month, sales totaled$13,750, of which $9,100 was sold on account. The cost of the goodssold totaled $9,200.
10. Employee wages for the month totaled $2,000; these will be paidduring the first week of the next month.
11. The firm collected a total of $3,450 from the sales on accountrecorded in transaction i.
12. The firm paid a total of $4,900 of the amount owed to suppliersfrom transaction e.

Required:

1. Record each transaction in the appropriate columns. Indicatethe financial statement effect.
2. Calculate the total assets, liabilities, and stockholders'equity at the end of the month and calculate the amount of netincome for the month.
3. After completing parts a throughl, prepare an income statement for Blue Co. StoresInc. for the month presented and a balance sheet at the end of themonth.