Mallard Incorporated (MI) is a small manufacturing company thatmakes model trains to sell to toy stores. It has a small servicedepartment that repairs customers’trains for a fee. Thecompany has been in business for five years. At the end of the mostrecent year, 2005, the accounting records reflected total assets of$500,000and total liabilities of $200,000. During the currentyear, 2006, the following summarized events occurred:a. Issued additional shares of stock for $100,000 cash.b. Borrowed $120,000 cash from the bank and signed a 10-yearnote.c. Built an addition on the factory for $200,000 and paid cashto the contractor.d. Purchased equipment for the new addition for $30,000, paying$3,000 in cash and signing a note due in six months for thebalance.e. Returned a $3,000 piece of equipment, from d,because it proved to be defective; received a reduction of the notepayable.f. Purchased a delivery truck (equipment) for $10,000; paid$5,000 cash and signed a nine month note for the remainder.g. At the end of 2006, lent $2,000 cash to the companypresident, Jennifer Mallard, who signed a note due in one year.h. A stockholder sold $5,000 of his capital stock in MallardIncorporated to his neighbor.Required:1. Complete the spreadsheet that follows, usingplus (+) for increases and minus (-) fordecreases for each account. The first transaction is used as anexample.Assets=Liabilities+Stockholders’ EquityNotesNotesContributedRetainedCashReceivable Equipment BuildingPayableCapitalEarnings(a) +100,000+100,0002. Did you include event h inthe spreadsheet? Why or why not?3. Based on beginning balances plus thecompleted spreadsheet, provide the following amounts (showcomputations):a. Total assets at the end of the year.b. Total liabilities at the end of the year.c. Total stockholders’ equity at the end of theyear.4. As of December 31, 2006, has the financing forMI’s investment in assets primarily come from liabilities orstockholders’ equity?