2.21. Analyzing Transactions.\ \ LO 2-4\ \ Using the analytical framework, indicate the effect of the following related transactions of a firm.\ \ January 1: Issued 10,000 shares of common stock for $50,000.\ January 1: Acquired a building costing $35,000, paying $5,000 in cash and borrowing the remainder from a bank.\ During the year: Acquired inventory costing $40,000 on account from various suppliers.\ During the year: Sold inventory costing $30,000 for $65,000 on account.\ During the year: Paid employees $15,000 as compensation for services rendered during the year.\ During the year: Collected $45,000 from customers related to sales on account.\ During the year: Paid merchandise suppliers $28,000 related to purchases on account.\ December 31: Recognized depreciation on the building of $7,000 for financial reporting. Depreciation expense for income tax purposes was $10,000.\ December 31: Recognized compensation for services rendered during the last week in December but not paid by year-end of $4,000.\ December 31: Recognized and paid interest on the bank loan in Part b of $2,400 for the year.\ Recognized income taxes on the net effect of the preceding transactions at an income tax rate of 40%. Assume that the firm pays cash immediately for any taxes currently due to the government.