Bishop Supply Company had the following transactions in 2012: 1. Acquired $60,000 cash from the issue of

Question:

Bishop Supply Company had the following transactions in 2012:

1. Acquired $60,000 cash from the issue of common stock.

2. Purchased $180,000 of merchandise for cash in 2012.

3. Sold merchandise that cost $110,000 for $200,000 during the year under the following terms:

$ 50,000 ..Cash sales

140,000 ..Credit card sales (The credit card company charges a 3 percent service fee.)

10,000 ..Sales on account

4. Collected all of the accounts receivable from the credit card company.

5. Collected $9,200 of accounts receivable.

6. Paid selling and administrative expenses of $46,000.

7. Determined that 5 percent of the ending accounts receivable balance would be uncollectible.

Required

a. Record the above events in a horizontal statements model like the following one. When you record amounts in the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). The letters NA indicate that an element is not affected by the event.

Bishop Supply Company had the following transactions in 2012: 1.

b. Prepare an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for2012.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...