The analytical framework used to evaluate transactions is reproduced below:

Cash

+

Non-Cash Assets

=

Liabilities

+

Contributed Capital

+

Accumulated Other Comprehensive Income

+

Retained Earnings

Using this analytical framework indicate the effect of each of the following three transactions for Mollydooker Wines:

• The sale of wine for $2 million on account (Accounts Receivable)
• The sold wine inventory has an accumulated cost of $1.6 million
• The immediate payment of income taxes at a 40% rate

Prepare the journal entries for the three transactions, and note the changes in assets, liability, and/or equity using the analytical framework.