The Numo Company, which was acquired (and renamed) in 2003 by E. R. Numo, sells frigets to multinational firms. In 2012, a venture capital firm provided additional funding in order to allow the company to expand operations. The following information was taken from the preliminary trial balance of Numo Company, a calendar year company, on December 31, 2012:Cash 74,000Accounts Receivable 60,000Inventory 88,000Transportation Equipment 203,000Accumulated Depreciation - Transportation Equipment 68,000Goodwill 200,000Accounts Payable 20,000Deferred Tax Liability - Depreciation 6,000Common Stock, $2 par 62,000Paid-in Capital in Excess of Par Value 81,000Retained Earnings, 1/1/12 280,000Sales 363,000Salaries/Compensation Expense 86,000Cost of Goods Sold 140,000Supplies Expense 16,000Depreciation Expense - Transportation Equipment 22,000Municipal Bond Interest 1,000Gain on Discontinued Operation - before tax 8,000However, the bookkeeping staff did NOT record the following transactions and adjustments because staff members were unsure about the appropriate accounting treatment:(1) On April 1st, 2012, Numo issued a five-year, $400,000, non-interest bearing note to the venture capital firm and received $248,368 in cash, which reflects a 10% market yield. For financial statement purposes, interest expense is recognized using the effective interest rate method. However, for tax purposes, interest is not deductible until paid, which will be at the end of the five-year period. HINT - In addition to the 4/1/12 transaction, be sure to record the required adjusting entry to record interest expense as of 12/31/12(2) In 2012, the company was accused of patent infringement. While the company is contesting the case, management believes that there is a probably loss of between $15,000 and $40,000. This loss has NOT been recorded HINT - Record the appropriate loss. This accrued liability should be considered a current liability. Also, remember that the loss is not deductible until paid.(3) During the last quarter of the year, Numo found that inventory originally costing $17,000 had become obsolete and was no longer saleable. However, Numo has made the decision to temporarily retain the goods to see if a buyer can be found. For tax purposes, the cost of obsolete inventory can not be deducted on the tax return until the goods are actually disposed of. Required:A. Record appropriate transactions and adjusting entries as described above. B. Partially prepare a multiple-step Income Statement (through Income before Income Taxes) in accordance with GAAP. C. Record Income tax Expense for 2012. The tax rate is 25% for all years. You have learned that the company's interest revenue is tax-exempt since it was earned on municipal bonds. In addition to the temporary differences described above, you have identified that a temporary difference exists for depreciation. As of 12/31/2011, there is a cumulative difference between �tax depreciation and �financial statement depreciation� that amounts to $24,000. In 2012, tax depreciation was $28,000 and book depreciation (already recorded - see trial balance) was $22,000. You may assume that all deferred tax assets, if any, will be realized. Then record the tax effect of the discontinued operation. You can assume that the discontinued operation is taxable on this year�s tax return. D. Complete your Income Statement. Be sure that it contains all items that are required by GAAP. You do NOT need to show Earnings Per Share data. E. Prepare a classified Balance Sheet in accordance with GAAP.