Dan Watson started a small merchandising business in Year $1.$ The business experienced the following operation. Assume that Watson uses the perpetual inventory system.

Acquired $$32,000$ cash from the issue of common stock.

Purchased inventory for $$25,600$ cash.

Sold inventory costing $$15,700$ for $$30,000$ cash.

Required:

a$.$ Use a horizontal financial statements model to show how each event affects the balance sheet, incon cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement the cash flows as operating activities $($OA$),$ investing activities $($IA$),$ or financing activities $($FA$).$

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 B

Prepare an income statement for Year $1($use the multistep format$).$

$\backslash$table$[[$DAN WATSON MERCHANDISING$],[$Income Statement$],[$For the Year Ended December $31,$ Year $1,],[$Net sales,$],[$Operating expens