Morris Supply Company had the following transactions in 2010. 1. Acquired $50,000 cash from the issue of
Question:
Morris Supply Company had the following transactions in 2010.
1. Acquired $50,000 cash from the issue of common stock.
2. Purchased $210,000 of merchandise for cash in 2010.
3. Sold merchandise that cost $140,000 for $265,000 during the year under the following terms.
$ 60,000 Cash sales
175,000 Credit card sales (The credit card company charges a 3 percent service fee.)
30,000 Sales on account
4. Collected all the amount receivable from the credit card company.
5. Collected $23,000 of accounts receivable.
6. Paid selling and administrative expenses of $76,000.
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.
.png)
b. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for2010.
Accounts ReceivableAccounts 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...
Step by Step Answer:
a Morris Supply Company Horizontal Statements Model Balance Sheet Income Statement Statement Assets Equity of Event Cash A Rec Allow Mdse Inv Com Stoc...View the full answer
