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 $29,500 cash from the issue of common stock. 2. Purchased inventory for $23,600 cash. 3. Sold inventory costing $18,800 for $32,000 cash. Required a. Record the events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. 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? Complete this question by entering your answers in the tabs below. Required A Required B Required C Record the events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. (Not every cell will require entry. Enter any decreases to account balances and cash outflows with a minus sign.) Assets = DAN WATSON MERCHANDISING Effect of Events on Financial Statements Stockholders' Equity Common Retained Revenue + Stock Earnings 29,500+ Event Expenses Net Income Statement of Cash Flows Cash + Inventory 1. = 2. 29,500+ (23,600) + 32,000 + 23,600 = + = 3a. + + 32,000 = 3b. 29,500FA (23,600) OA 32,000OA 0 37,900 NC + + 32,000 (18,800) 13,200 (18,800) = 4,800 32,000 (18,800) 13,200 18,800 = 18,800 Total 37,900 + 29,500 + 32,000 Required A Required B Required C Prepare an income statement for Year 1 (use the multistep DAN WATSON MERCHANDISING Income Statement For the Year Ended December 31, Year 1 Net sales $ 32,000 Cost of goods sold 18,800 13,200 Operating expenses Net income $ 13,200 What is the amount of total assets at the end of the period? Total assets $ 42,700