ces Powell Company began the Year 3 accounting period with $41,000 cash, $87,000 inventory, $61,000 common stock, and $67,000 retained earnings. During Year 3, Powell experienced the following events: 1. Sold merchandise costing $58,500 for $100,500 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $800 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,100 and were sold to Prentise for $6,000. 4. Granted Prentise a $3,100 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $81,500 cash from accounts receivable. Required a. Record the events in a statements model shown below. b. Prepare an income statement, a balance sheet, and a statement of cash flows. c. Why would Prentise agree to keep the damaged goods? Complete this question by entering your answers in the tabs below. Req A Req B1 Req BZ Req B3 Req C Check Record the events in a statements model shown below. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow colum to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the account is not affected by the event, leave every cell will require entry.) Record the events in a statements model shown below. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cam to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the account is not affected by th every cell will require entry.) POWELL COMPANY Financial Statements Model for Year 3 k Event No. Cash Assets Accounts Receivable. Stockholders' Equity Income Statement + Inventory Common Stock Retained Revenue Expenses = Earnings Net Income Statement of Cash Flows " Bal. 41,000+ 87,000 = 61,000+ 67,000 nces 1a. + (58,500) 58,500 1b. 100,500+ 100,500 = 100,500 2 (800)+ (800) 800= (800) (800) 3a. 4,100 4,100 3b. (6,000) + (6,000) (6,000) 4. (3,100)+ (3,100) (3,100) 5 Total 81,500+ 121,700+ (81,500)+ 81,500 9,900 + 32,600 61,000+ 63,100 94,500 59,300= 94,700 80,700 Req 81 > es Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req 83 Req C Prepare an income statement for Powell Company. POWELL COMPANY Income Statement For the Year Ended December 31, Year 3 Operating expenses 0 $ 0 6 Complete this question by entering your answers in the tabs below. 10 points eBook Hint Req A Req B1 Req 82 Req B3 Req C Prepare a balance sheet for Powell Company. POWELL COMPANY Balance Sheet As of December 31, Year 3 Print Assets References Total assets Liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity + $ 0 0 $ 0 10 Saved 6 Complete this question by entering your answers in the tabs below. points Req A Req B1 Req B2 Req B3 Req C eBook Prepare a statement of cash flows for Powell Company. (Cash outflows should be indicated with a minus sign.) POWELL COMPANY Statement of Cash Flows Hint Print References For the Year Ended December 31, Year 3 Cash flow from operating activities Net cash flow from operating activities Cash flows from investing activities: Cash flows from financing activities: Net change in cash Ending cash balance $ 0 0 $ 0 6 10 points eBook Hint Print References c. Why would Prentise agree to keep the damaged goods? Complete this question by entering your answers in the abs below. Req A Req B1 Req B2 Req B3 Req C Why would Prentise agree to keep the damaged goods? (Select "Yes" if the item is a reason to agree, and "No" if Get goods at reduced cost. Can resell the damaged goods. Repair the damaged goods. Retain the damaged goods