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During Year 1, Hardy Merchandising Company purchased $14,000 of inventory on account. Hardy sold inventory on account that cost $10,500 for $15,800. Cash payments on
During Year 1, Hardy Merchandising Company purchased $14,000 of inventory on account. Hardy sold inventory on account that cost $10,500 for $15,800. Cash payments on accounts payable were $8,800. There was $14,100 cash collected from accounts receivable. Hardy also paid $3,400 cash for operating expenses. Assume that Hardy started the accounting period with $25,000 in both cash and common stock. Required a. Identify the events described in the preceding paragraph and show them in a horizontal statements model. The first event is recorded as an example. b. What is the balance of accounts receivable at the end of Year 1? c. What is the balance of accounts payable at the end of Year 1? d. What are the amounts of gross margin and net income for Year 1? e. Determine the amount of net cash flow from operating activities. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Identify the events described in the preceding paragraph and show them in a horizontal statements model. The first event is recorded as an example. (In the Cash Flow co financing activities, and "NC" for net change in cash. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no correspond Income Statement Assets HARDY MERCHANDISING COMPANY Effect of Events on the Financial Statements Balance Sheet Liabilities Stockholders' Equity Accounts Common Retained Inventory Payable Stock Earnings 25,000 + Revenue Expenses Net Income Events Cash Accounts Receivable + + 25,000 1. 14,000 14,000 5,300 5,300 2a. Beg bal. Pur. inv. Sold inv Inv. cost Pd. AP 15,800 x 15,800 2b. (10,500) x 10,500 3. (8,800) (8,800)
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