Clayton Computers was started in 2014. The company experienced the following accounting events during its first year of operation.

1.	Started business when it acquired $87,000 cash from the issue of common stock.
2.	Purchased merchandise with a list price of $71,000 on account, terms 3/10, n/30.
3.	Paid off one-half of the accounts payable balance within the discount period.
4.	Sold merchandise on account that had a list price of $57,700. Credit terms were 2/20, n/30. The merchandise had cost Clayton Computers $34,600.
5.	Collected cash from the account receivable within the discount period.
6.	Paid $10,300 cash for operating expenses.
7.	Paid the balance due on accounts payable. The payment was not made within the discount period.

Required

a.

Record the events in a horizontal statements model below. In the Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts 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.)

CLAYTON COMPUTERS Horizontal Statements Model for 2014 Income Statement Statement of Cash Flows Assets = Liabilities + Stockholders' Equity AccountsStock Retained Revenue Earnings Net Income nts Common Accounts + Inventory = Payable Receivable Eve - Expenses = Cash Accounts 87,000 FA 87,000+ 87,000+ 2. 4a 4b 6 0 87,000 87,000+ 87,000+