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Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. 1. Acquired $25,500 cash from the issue of common stock. 2. Purchased inventory for $20,400 cash. 3. Sold inventory costing $18,900 for $30,000 cash. Required: a. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). b. Prepare an income statement for Year 1 (use the multistep format). c. What is the amount of total assets at the end of the period? Complete this question by entering your answers in the tabs below. Required A Required B Required C Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). utflows with a minus sign. Leave cells blank if no input is needed.

Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. 1. Acquired $25,500 cash from the issue of common stock. 2. Purchased inventory for $20,400 cash. 3. Sold inventory costing $18,900 for $30,000 cash. Required: a. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). b. Prepare an income statement for Year 1 (use the multistep format). c. What is the amount of total assets at the end of the period? Complete this question by entering your answers in the tabs below. Required A Required B Required C Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). utflows with a minus sign. Leave cells blank if no input is needed.

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business
Section: Chapter Questions
Problem 1CP
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es Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. 1. Acquired $25,500 cash from the issue of common stock. 2. Purchased inventory for $20,400 cash. 3. Sold inventory costing $18,900 for $30,000 cash. Required: a. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). b. Prepare an income statement for Year 1 (use the multistep format). c. What is the amount of total assets at the end of the period? Complete this question by entering your answers in the tabs below. Required A Required B Required C Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Show less A
Transcribed Image Text:es Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. 1. Acquired $25,500 cash from the issue of common stock. 2. Purchased inventory for $20,400 cash. 3. Sold inventory costing $18,900 for $30,000 cash. Required: a. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). b. Prepare an income statement for Year 1 (use the multistep format). c. What is the amount of total assets at the end of the period? Complete this question by entering your answers in the tabs below. Required A Required B Required C Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Show less A
Complete this question by entering your answers in the tabs below. Required A Required B Total assets Required C What is the amount of total assets at the end of the period? < Required B Required C
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required A Required B Total assets Required C What is the amount of total assets at the end of the period? < Required B Required C
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