Dan Watson started a small merchandising business in 2016. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system.

1.	Acquired $30,000 cash from the issue of common stock.
2.	Purchased inventory for $18,000 cash.
3.	Sold inventory costing $15,000 for $32,000 cash.

Required

a.	Record the events in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b.	Post the entries to T-accounts.

cash

common stock

merchanise inventory

sales revenue

cost of goods sold

c.	Prepare an income statement for 2016.

d.	What is the amount of net cash flow from operating activities for 2016? (Indicate cash outflows with minus sign.)