Sefcik Company began operations on the first of October. Following are the transactions for its first month of business.

1. S. Sefcik launched Sefcik Company and invested $ 50,000 into the business in exchange for common stock. The company also borrowed $ 100,000 from a local bank.

2. Sefcik Co. purchased equipment for $ 95,000 cash and purchased inventory of $ 40,000 on credit (the company still owes its suppliers for the inventory at month-end).

3. Sefcik Co. sold inventory costing \(\$ 30,000\) for $ 50,000 cash.

4. Sefcik Co. paid $ 12,000 cash for wages owed employees for October work.

5. Sefcik Co. paid interest on the bank loan of $ 1,000 cash.

6. Sefcik Co. recorded $ 500 of depreciation expense related to its equipment.

7. Sefcik Co. paid a dividend of $ 2,000 cash.

Required

a. Record the effects of each transaction using the financial statement effects template.

b. Prepare the income statement and balance sheet at the end of October.