Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European mixers. The owner of Kzinski Supply Company has approached Natalie to become the exclusive U.S. distributor of these fine mixers in her state. The current cost of a mixer is approximately $575 (U.S.), and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these mixers.

Using the information that you have gathered and the general ledger accounts that you have prepared through Chapter 4, plus the new information above, do the following.

(a)  Answer Natalie’s questions.

(b)  Prepare and post the January transactions.

(c)  Prepare a trial balance.

(d)  Prepare and post the adjusting journal entries required.

(e)  Prepare an adjusted trial balance.

(f)   Prepare a multiple-step income statement and retained earnings statement for the month ended January 31.