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.

1. Acquired $32,500 cash from the issue of common stock.
2. Purchased inventory for $26,000 cash.
3. Sold inventory costing $15,300 for $30,000 cash.

Required a. Record the events in general journal format. b. Post the entries to T-accounts. c. Determine the amount of gross margin. d. What is the amount of net cash flow from operating activities for Year 1?

View transaction list X: > 1 Record entry for issuance of common stock. 2 Record the entry of inventory purchased for cash. 3 Record sale of inventory for cash. 4 Record entry for cost of goods sold. Credit Note : = journal entry has been entered Record entry Clear entry View general journal Post the entries to T-accounts. Cash Common Stock Beg. Bal. Beg. Bal. End. Bal. End. Bal. Merchandise Inventory Sales Revenue Beg. Bal. Beg. Bal. End. Bal. End. Bal. Cost of Goods Sold Beg. Bal. End. Bal. Determine the amount of gross margin. DAN WATSON MERCHANDISING Income Statement For the Year Ended December 31, Year 1 0