b. Record each event in a horizontal statements model. The first event is recorded as an example. (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. Enter any decreases to account balances and cash outflows with a minus sign.) THE PET STORE Horizontal Statements Model for Year 1 Balance Sheet Income Statement Stockholders' Equity Assets Accounts Receivable Liabilities RevenueExpenseNet Income Statement of Cash Flow InventoryAccounts Payable Common Retained Earnings Cash Events 1. Stock 2. Pur inv 3. Freight 4a. Sold inv Stock + 65,000+ 65,000 65,000 FA 4b. Cost 5. Pd. frt. 6a. Ret. sale 6b. Ret. inv 7. Coll. AR 8. Pd. AP 9. Pd. exp 10 Pd. exp End Bal 65,000 + 65,000+ 0 65,000 The Pet Store experienced the following events for the Year 1 accounting period: Acquired $65,000 cash from the issue of common stock. 2. Purchased $74,500 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $1,670 paid in cash. 4. Sold inventory on account that cost $33,000 for $61,000 5. Freight cost on the goods sold in Event 4 was $1,220. The goods were shipped FOB destination. Cash was paid for the freight cost 6. Customer in Event 4 returned $5,480 worth of goods that had a cost of $2,790 7. Collected $50,020 cash from accounts receivable. 8. Paid $54,200 cash on accounts payable. 9. Paid $3,420 for advertising expense. 0. Paid $3,350 cash for insurance expense. Required a. Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction NA. Transaction Cost 2. 3. 4. 5. 6 7. 8. 9. 10