During 2014, the company experienced the following events: 1. Purchased inventory that cost $5,400 on account from Bivins Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $490 were paid in cash. 2. Returned $450 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost. 3. Paid the amount due on its account payable to Bivins Company within the cash discount period. 4. Sold inventory that had cost $5,900 for $8,900 on account, under terms 2/10, n/45. 5. Received merchandise returned from a customer. The merchandise originally cost $490 and was sold to the customer for $790 cash. The customer was paid $790 cash for the returned merchandise. 6. Delivered goods FOB destination in Event 4. Freight costs of $590 were paid in cash. 7. Collected the amount due on the account receivable within the discount period. 8. Took a physical count indicating that $1,600 of inventory was on hand at the end of the accounting period.

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Required b. Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) BRADLEY COMPANY Horizontal Statements Model 2014 Balance Sheet Income statement Statement of Cash Assets Liabilities Stockholders' Equity Event Net Flows Accounts Merchandise- Accounts Common Retained Revenue Expenses Cash ncome Earnings Receivable Invento Payable Stock Bal 7,900 1,900 7,400 1 2,400 NA 1 0 0 5,400 5,400 0 0 0 0 0 0 NA 0 (490) OA 490 E 2 0 0 (450) 4500 0 0 0 0 0 0 NA 0 (4,851) OA (4,950) 4a. 0 8,900 0 0 0 8,900 8,900 0 8,900 0 NA 4b 0 0 (5,900) 0 0 (5,900) 0 5,900 (5,900) 0 NA (790) (790) OA 5b 0 0 490 0 0 490 0 (490) 490 0 NA 6. (590) 0 0 0 0 (590) 0 590 (590) (590) OA 7 8,722 (8,900) 0 0 0 1780 178 0 (178) 8.722 OA 8 0 0 0 0 0 0 0 0 0 NA Bal. S 9.901 S 0 S 1,930 IS 0+S 7400 S 4.332 S 7932 S 6.000 1 S 2.001