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 $26,000 cash from the issue of common stock. 2. Purchased inventory for $20,800 cash. 3. Sold inventory costing $16,400 for $28,500 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? Record the events in a horitontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investme 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 ent account balances and cash outhows with a minus sign.) Prepare an income statement for Year 1 (use the multistep format). Total assets