Academy Sales Company (ASC) started the Year 2 accounting period with the balances given in the financial statements model shown as follows. During Year 2, ASC experienced the following business events: 1. Purchased $18,000 of merchandise Inventory on account, terms 2/10, 1/30. 2. The goods that were purchased in Event 1 were delivered FOB shipping point. Freight costs of $620 were paid in cash by the responsible party 3. Returned $500 of goods purchased in Event 1. 4. (a) Recorded the cash discount on the goods purchased in Event 1. (b) Pald the balance due on the account payable within the discount period. 5. (a) Recognized $23,000 of cash revenue from the sale of merchandise. (b) Recognized $17,000 of cost of goods sold. 6. The merchandise in Event 5a was sold to customers FOB destination. Freight costs of $970 were paid in cash by the responsible party 7. Pald cash of $4,200 for selling and administrative expenses, 8. Sold the land for $7,800 cash 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 income statement d. ASC's gross margin percentage in Year 1 was 22 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 Year 3? Complete this question by entering your answers in the tabs below. Reg A Req Regc Reg D and E Record these transactions in a financial statements model. (In the Cash Flow column, use the initials OA to designate operating activity, IA for inves decreases 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, ACADEMY SALES COMPANY Financial Statements Model Academy Sales Company (ASC) started the Year 2 accounting period with the balances given in the financial statements model shown as follows. During Year 2, ASC experienced the following business events: 1. Purchased $18,000 of merchandise Inventory on account, terms 2/10, 1/30. 2. The goods that were purchased in Event 1 were delivered FOB shipping point. Freight costs of $620 were paid in cash by the responsible party 3. Returned $500 of goods purchased in Event 1. 4. (a) Recorded the cash discount on the goods purchased in Event 1. (b) Pald the balance due on the account payable within the discount period. 5. (a) Recognized $23,000 of cash revenue from the sale of merchandise. (b) Recognized $17,000 of cost of goods sold. 6. The merchandise in Event 5a was sold to customers FOB destination. Freight costs of $970 were paid in cash by the responsible party 7. Pald cash of $4,200 for selling and administrative expenses, 8. Sold the land for $7,800 cash 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 income statement d. ASC's gross margin percentage in Year 1 was 22 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 Year 3? Complete this question by entering your answers in the tabs below. Reg A Req Regc Reg D and E Record these transactions in a financial statements model. (In the Cash Flow column, use the initials OA to designate operating activity, IA for inves decreases 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, ACADEMY SALES COMPANY Financial Statements Model
