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 $31,500 cash from the issue of common stock. 2. Purchased inventory for $25,200 cash. 3. Sold inventory costing $18,600 for $30,500 cash. Required: a. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify 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 A Required B Required C Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Event 1. 2 3a. 3b Cash Total COLONE Assets + Inventory + 0+ NC-Net change in cash 0 DAN WATSON MERCHANDISING Effect of Events on Financial Statements Stockholders' Equity Common Stock + 0+ Retained Revenue Expenses Earnings 0 TOOL-CHEM= WHEREIN 0 10= Net Income 10 Statement of Cash Flows ONC Show less A

Dan Watson-started a small merchandising business in Year t. The business experienced the following events during iss first year of operation. Assume that Watson uses the perpetual inventory system. 1. Acquired $31,500 cash from the issue of common stock. 2. Purchased inventory for $25,200cash. 3. Sold inventory costing $18,600 for $30,500cash. Requilred: Q. Use a horizontal financial stotements model to show how each event affects the batance sheet, income statentent, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the 5 tatement of Cash Fiows column, classify the cash fows as operating activities (OA), investing activities (A), or financing activities (FA). b. Prepare an income statement for Year 1 (use the multistep format). c. What is the amount of total assets of the end of the period? Complete this question by entering vour answers in the tabs belew. Was a horitental financial statements model to shon how each event affects the balance sheet, income statiment, and statement of cash flown. More apecilically. recurd the amounts of the kvents into the model. Nso, in the Statement of Cach Fons column, classify the cash flows as operating activities (OA), inventing activities (IA), or financing activities (FA). Noter Enter any decresies te accorunt balances and cash outflows with a minus sign. Lave cells blank t ho input is ineeded