Chris Daniels started a small merchandising business in 2010. The business experienced the following events during its first year of operation. Assume that Daniels uses the perpetual inventory system.

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

2. Purchased inventory for $50,000 cash.

3. Sold inventory costing $36,000 for $56,000 cash.

Required

a. Record the events in a statements model like the one shown below.

b. Prepare an income statement for 2010 (use the multi-step format).
c. What is the amount of total assets at the end of theperiod?

Transcribed Image Text:

Assets Equity Rev Exp. Net Inc Cash Flow Cash + Inv. - Com. Stk. + Ret Earn.