3. Gains & Losses for Two Accounting Cycles (LO4.1)

At the beginning of Year 2, the Bradley Company had the following balances in its accounts:

Cash	$53,600
Inventory	18,000
Common Stock	65,000
Retained Earnings	6,600

During Year 2, the company experienced the following events:

1. Purchased inventory that cost $4,400 on account from Bivins Company.
2. Purchased two $50,000 tracts of land for a total price of $100,000. 30% was paid in cash, the balance was borrowed from the bank.
3. Sold inventory that cost $6,000 for $11,000 on account.
4. Purchased a delivery van for $15,000 cash.
5. Paid half the amount due to Bivins Company.
6. Paid 10% of the outstanding balance on the land note.
7. Sold one tract of land for $70,000 cash.

During Year 3, the company experienced the following events:

8. Paid the balance due on the land note.
9. Sold inventory that cost $5,000 for $8,000.
10. Paid $2,000 to Bivins Company for inventory previously purchased on account.
11. Collected amount due on account receivable.
12. Sold the delivery van for $13,000. Buyer could not pay in cash so Bradley Company agreed to hold a note.

Required Record each event in the horizontal financial statement model. Event Cash A/R Inv. Van Land N/R A/P N/P CS RE Rev. Gain Exp. Loss = NI BB 53600 65000 18000 4400 6600 4400 1 4400 4400 2 100000 70000 (30000) 11000 3 11000 11000 (6000) (6000) 6000 4 15000 5 (2200) (2200) (15000) (2200) (7000) 70000 80400 2200 7000 6 (7000) 7 (50000) 50000 16400 15000 2200 YC 2 8 63000 65000 13800 9 10 HIST YC 3