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Mr. Lee, who won in a lottery, earned 1 million dollars from a lottery after payment of individual income tax for this event. With the amount of money, he purchased a grocery at a price $600,000 on January 1,2002, the grocery, which including inventories amount to $200,000 and business equipments $50,000, will be dismantled in 7 year because of occupation of new express way. With the grocery, Mr. Lee began his business. As usually, credit transactions always occurred in both his purchase and sale, and recorded by himself. All cash transactions, without any record, has been controlled by Mr. Lee, At the end of 2002, the tax authority urged him to pay business income tax. But he can not provide any data of his annually profit. He had to ask you to help. When you agree to do so. How to start your accounting job for Mr. Lee’s grocery?

•After your physical check and interview with Mr. Lee, you obtained following information
•Cash in hand $160,000
•I

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