5.55 points Marcus Xavier noticed that many small rural towns did not have retail sporting goods outlets. To address this need, Marcus created Xavier Sporting Goods. The business experienced the following events during its first year of operation. 1. Acquired $74,000 cash from the issue of common stock. 2. On February 1, Year 1, Xavier Sporting Goods purchased merchandise inventory for $39,000 on account from True Sports Incorporated. 3. On February 15, Year 1, Xavier Sporting Goods returned $17,000 worth of merchandise inventory to True Sports Incorporated. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction is shown as an example. Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Event Number 1. 2. 3. Total Cash 74,000 Assets + + + (37,050) X + 36,950 Inventory = = = 39,000 = 2,650 X = 41,650 Balance Sheet Liabilities Accounts Payable 39,000 39.000 + + + + + + Stockholders' Equity Common Stock 74,000 Answer is not complete. 74.000 + + + + + Retained Earnings Revenue 0 Income Statement - Expenses 0 = = = Net Income Stat Cas 74,000 74.000

Marcus Xavier noticed that many small rural towns did not have retail sporting goods outlets. To address this need, Marcus created Xavier Sporting Goods. The business experienced the following events during its first year of operation. 1. Acquired $74,000 cash from the issue of common stock: 2. On February 1, Year 1, Xavier Sporting Goods purchased merchandise inventory for $39,000 on account from True Sports Incorporated. 3. On February 15, Year 1, Xavier Sporting Goods returned \$17,000 worth of merchandise inventory to True Sports Incorporated. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities ( (A), or financing activities (FA). The first transaction is shown as an examplo. Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed