Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
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 $30,000 cash from the issue of common stock. 2. Purchased inventory for $24,000 cash. 3. Sold inventory costing $15,500 for $30,500 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? Complete this question by entering your answers in the tabs balow. Required A Required Required Record the events in a horizontal statement model. In the Cash Flow column, use OA to designato operating activity ta 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.) DAN WATSON MERCHANDISING Effect of Events on Financial Statements Stockholders' Equity Event Statement of Cash Net Revenue Cash Common Retained Expenses Inventory Income flows Stock Earnings 1 Required A Required B Required C Prepare an income statement for Year 1 (use the multistep format). DAN WATSON MERCHANDISING Income Statement For the Year Ended December 31, Year 1 Operating expenses operation. Assume that Watson uses the perpetual inventory system, 1. Acquired $30,000 cash from the issue of common stock 2. Purchased Inventory for $24,000 cash. 3. Sold inventory costing $15,500 for $30,500 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? Complete this question by entering your answers in the tabs below. Required A Rented Denind

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

design a simple disciplinary and grievance procedure.

Answered: 1 week ago