Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. a. Acquired $34,000 cash from the issue of common stock. b. Purchased inventory for $27,200 cash. c. Sold inventory costing $17,200 for $32,500 cash. Required: a. Record the events in a horizontal financial statements model. b. Prepare an income statement for Year 1 (use the multistep format). c. What is the amount of total assets at the end of the period?

Dan Watson started a small merchandising business in Year 1 . The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. a. Acquired $34,000 cash from the issue of common stock. b. Purchased inventory for $27,200 cash. c. Sold inventory costing $17,200 for $32,500 cash. Required: a. Record the events in a horizontal financial statements model. b. Prepare an income statement for Year 1 (use the multistep format) c. What is the amount of total assets at the end of the period