At the beginning of 2013, the Bradley Company had the following balances in its accounts:

Cash	$	8,500
Inventory		2,500
Common stock		8,000
Retained earnings		3,000

During 2014, the company experienced the following events:

1.

Purchased inventory that cost $6,000 on account from Bivins Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $550 were paid in cash.

2.

Returned $400 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost.

3.

Paid the amount due on its account payable to Bivins Company within the cash discount period.

4.

Sold inventory that had cost $6,500 for $9,500 on account, under terms 2/10, n/45.

5.

Received merchandise returned from a customer. The merchandise originally cost $550 and was sold to the customer for $850 cash. The customer was paid $850 cash for the returned merchandise.

6.

Delivered goods FOB destination in Event 4. Freight costs of $650 were paid in cash.

7.

Collected the amount due on the account receivable within the discount period.

8.

Took a physical count indicating that $2,200 of inventory was on hand at the end of the accounting period.

question:

Required

b.

Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.)

event	cash	accounts rece.	merchandise inventory	Accounts Payable	Common Stocks	Retained earnings	Revenue	Expenses	Net Income	Statement of cash flows
Bal
1a
1b
2
3
4a
4b
5a
5b
6
7
8
bal

Multistep Income Statement

For the year end December 31st, 2014

Operating Expenses

Prepare a statement of changes in stockholders equity.

Beginning Commmon Stock
Ending Common Stock
Beginning Retained Earnings
Ending Retained Earningst
Total Stock Holder's Equity

Prepare a balance Sheet

As of December 31st 2014

Assets
Total Assets
Liabilities
Stockholder's Equity
Total Stockholder's Equity
Total liabilities and Stockholder's Equity

Prepare Statment of Cash Flows

For Year End December 31st 2014

Cash Flows for Operating Activities
Net Cash flows for operating Activities
Cash flows from investing activities
cash flows from financing activities
Net change in cash
Ending cash balance