During Year 1, Hardy Merchandising Company purchased $21,000 of inventory on account. Hardy sold inventory on account that cost $15,800 for $23,600. Cash payments on accounts payable were $13,100. There was $21,000 cash collected from accounts receivable. Hardy also paid $4,100 cash for operating expenses. Assume that Hardy started the accounting period with $18,500 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. HARDY MERCHANDISING COMPANY Effect of Events on the Financial Statements Balance Sheet Income Statement Assets + Revenue Expenses Net Income Statement of Cash Flows Liabilities Accounts Payable Events Cash Accounts Receivable + + Inventory = + Stockholders' Equity Common Retained Stock Earnings 18,500 + Beg. bal. 18,500 NA 1. Pur. inv. 2a. Sold inv. 2b. Inv. cost 3. Pd. AP 4. Coll. AR 5. Pd. exp. End. bal. 18,500 + 0 + 0 = 0 + 18,500 + 0 0 0 = 0