3 P Academy Sales Company (ASC) started the Year 2 accounting period with the balances given in the financial statements mode shown as follows. During Year 2. ASC experienced the following business events 1. Purchased $20,000 of merchandise inventory on account terms 2/10,n30. 2. The goods that were purchased in Event were delivered FOB shipping point. Freight costs of $640 were paid in cash by the responsible party 3. Returned $1.000 of goods purchased in Event 1 4. a) Recorded the cash discount on the goods purchased in Event (6) Paid the balance due on the account payable within the discount period S. (A) Recognized $26,000 of cash revenue from the sale of merchandise b) Recognized $19.000 of cost of goods sold. 6. The merchandise in Event 5a was sold to customers FOB destination Freight costs of $990 were paid in cash by the responsible party 7. Paid cash of $4,400 for selling and administrative expenses. 8. Sold the land for $7,500 cash Required a. Record these transactions in a financial statements model b. Prepare a schedule of cost of goods sold (Appendo c. Prepare a multistep income statement. Include common size percentages on the income statement d. ASC's gross margin percentage in Year 1 was 20 percent. Based on the common size data in the income statement, did ASC raise or lower its prices in Year 2 Appendix? e. Assuming a 10 percent rate of growth, what is the amount of net income expected for Your 3? Complete this question by entering your answers in the tabs below. Reg A Req8 Req Reg Dande Record these transactions in a financial statements model in the cash flow column, use the initials OA to designate operating activity, IA for investing iese transactions in a financial statements model. (In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA s to account balances with a minus sign. Not all cells require input. If there is no effect on the Account Titles for Statement of Cash Flows, leave the cell bla ACADEMY SALES COMPANY Financial Statements Model Income Statement Statement of C Balance Sheet Liabilities Land Accounts Payable 7.000 ol+ 20,000+ Stockholders' Equity Common Retained Stock Earning 22.000 19,000 Revenue/ Gain Assets Cash + Inventory 29,000 - 5,000 + 20,000 - (640) + (1.000) Expense Net Income 540 (640) (640) OA . ----- (1.000) (30) (18.970) 30 301 18,9701 26.000 (18,970) OA 25,00 OA 28,000 (19,000) + 19,000 - 990 = 4,4001 - (990) (4.400) 7,500 75,440+ + 26,000 (19,000) (990) (4.400) 500 1,500 (7.000) 0 (990) OA (4.400) OA 7,500 FA 8,500 NC 5,000 0+ 22,000+ 19,000 500 26,530 25.030 ReqB > Required a. Record these transactions in a financial statements model. b. Prepare a schedule of cost of goods sold (Appendix). c. Prepare a multistep income statement. Include common size percentages on the inco d. ASC's gross margin percentage in Year 1 was 20 percent. Based on the common size lower its prices in Year 2 (Appendix)? e. Assuming a 10 percent rate of growth, what is the amount of net income expected for Complete this question by entering your answers in the tabs below. Reg A Req B Req c Req D and E Prepare a schedule of cost of goods sold (Appendix). ACADEMY SALES COMPANY Schedule of Cost of Goods Sold For the Period Ended December 31, Year 2 Beginning inventory $ 5,000 Plus: Purchases Less: Purchase returns and allowances Goods available for sale Less: Purchases discounts Cost of goods sold Req A Req B Reg C Reg D and E Prepare a multistep income statement. Include common size percentages on the income stateme answers to 1 decimal place.) ACADEMY SALES COMPANY Income Statement For the Period Ended December 31, Year 2 % 0 0.0 Less: Operating expenses 0 0.0 Nonoperating items 0 0.0