Exercise 3-15A (Algo) Single-step and multistep income statements LO 3-6 The following information was taken from the accounts of Green Market, a delicatessen, at December 31, Year 2. The accounts are listed in alphabetical order, and each has a normal balance. Accounts payable Accounts receivable Advertising expense Cash Common stock Cost of goods sold Interest expense Merchandise inventory Prepaid rent Retained earnings, 1/1/Year 2 Sales revenue Salaries expense Rent expense Gain on sale of land $ 604 404 200 414 204 600 66 410 44 639 1,040 170 100 79 Required Prepare an income statement for the year using the single-step and multistep approach Answer is not complete. Complete this question by entering your answers in the tabs below. Single step Multistep Prepare an income statement for the year using the single-step approach. (Enter any losses with a minus sign.) GREEN MARKET Single-Step Income Statement For the Year Ended December 31, Year 2 Expenses Advertising expense S Accounts payable (600) X (200) x Accounts payable 66 Accounts receivable Cash Advertising expense Total cost and expenses Accounts receivable Net income (loss) 170 100 S 1,040 < Single step (464) 79 17 Multistep > Exercise 3-15A (Algo) Single-step and multistep Income statements LO 3-6 The following information was taken from the accounts of Green Market, a delicatessen, at December 31, Year 2. The accounts are listed in alphabetical order, and each has a normal balance. Accounts payable Accounts receivable Advertising expense Cash Common stock Cost of goods sold Interest expense Merchandise inventory Prepaid rent Retained earnings, 1/1/Year 2 Sales revenue Salaries expense Rent expense Gain on sale of land $ 604 404 200 414 204 600 66 410 44 639 1,040 170 100 79 Required Prepare an income statement for the year using the single-step and multistep approach Answer is not complete. Complete this question by entering your answers in the tabs below. Single step Multistep Prepare an income statement for the year using the single-step approach. (Enter any losses with a minus sign.) GREEN MARKET Single-Step Income Statement For the Year Ended December 31, Year 2 Expenses Advertising expense S Accounts payable (600) x (200) x Accounts payable 66 Accounts receivable 170 Cash 100 Advertising expense Total cost and expenses Accounts receivable Net income (loss) S 1,040 (464) 79 S 17 Single step Multistep > Exercise 3-9A (Algo) Effect of product cost and period cost: Horizontal statements model LO 3-1, 3-2, 3-4 The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $70,000 cash from the issue of common stock. 2. Purchased $61,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $1,870 paid in cash. 4. Sold inventory on account that cost $51,000 for $97,000. 5. Freight cost on the goods sold in Event 4 was $1,020. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $4,540 worth of goods that had a cost of $2,320. 7. Collected $79,540 cash from accounts receivable. 8. Paid $56,200 cash on accounts payable. 9. Paid $3,020 cash for advertising expense. 10. Paid $4,050 cash for insurance expense. Required a. Which of these events affect period (selling and administrative) costs? Which result in product costs? b. Record the above 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. The first event is recorded as an example. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Which of these events affect period (selling and administrative) costs? Which result in product costs? (Not all cells require entry.) Transaction Cost 1. 2. Product costs 3. Product costs 4. 5. 6. 7. 8. 9. Period costs 10. Period costs Required A Required B > LAGILINE J*M (MIYU) LITELI DI PIVORCE LOST Bna pervu QSL TULEVILLE SOLEN MQUEI LU UTI, UT, UT The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $70,000 cash from the issue of common stock. 2. Purchased $61,000 of Inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $1,870 paid in cash. 4. Sold Inventory on account that cost $51,000 for $97,000. 5. Freight cost on the goods sold in Event 4 was $1,020. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer In Event 4 returned $4,540 worth of goods that had a cost of $2,320. 7. Collected $79,540 cash from accounts receivable. 8. Paid $56,200 cash on accounts payable. 9. Paid $3,020 cash for advertising expense. 10. Paid $4,050 cash for Insurance expense. Required a. Which of these events affect period (selling and administrative) costs? Which result in product costs? b. Record the above 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. The first event is recorded as an example. Complete this question by entering your answers in the tabs below. Required A Required B * Answer is not complete. Record the above 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. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require entry.) THE PET STORE Horizontal Statements Model for Year 1 Show less Balance Sheet Income Statement Event Cash + Assets Accounts Receivable = + Inventory = Liabilities + Accounts Payable Stockholders' Equity Statement of + Common Stock + Retained Earnings Revenue |- Expenses = Net Income Cash Flows 1. 70,000 + + |= + 70,000 + 2. + + 3. (1,870) + + 61,000 - 1,870 = 61,000+ + + + 4a. + 97,000 + (51,000) = + + 48,000 x 4b. + + = + + 5. (1,020) + + = + + 6a. + (4.540) + = + + 6b. + + 2,320 = + + 7. 79,540 + (79,540) + = = = = = = = = = = 70,000 FA + + 8. (58,200) + + = (56,200) = + + 9. (3,020) = + + + + = 10. (4,050) + + = + + Bal. 83,380 |+ 12,920 + 14,190 = 4,800 + 70,000 48,000 + = 0 0 = 0 70,000 < Required A Required B > Problem 3-22A (Algo) Effect of purchase returns and allowances and purchase discounts on the financial statements: Perpetual system LO 3-2, 3-3 The following events were completed by Dana's Imports In September, Year 1: Sept. 1 Acquired $43,000 cash from the issue of common stock. Required 1 Purchased $29,500 of merchandise on account with terms 2/10, n/30. 5 Paid $700 cash for freight to obtain merchandise purchased on September 1. 8 Sold merchandise that cost $9,750 to customers for $16,000 on account, with terms 2/10, n/30. 8 Returned $750 of defective merchandise from the September 1 purchase to the supplier. 10 Paid cash for the balance due on the merchandise purchased on September 1. 20 Received cash from customers of September 8 sale in settlement of the account balances, but not within the discount period. 30 Paid $2,850 cash for selling expenses. a. 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, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The first event is recorded as an example. b. Prepare an income statement for the month ending September 30. c. Prepare a statement of cash flows for the month ending September 30. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a statement of cash flows for the month ending September 30. (Cash outflows should be indicated with a minus sign.) DANA'S IMPORTS Statement of Cash Flows For the Month ended September 30, Year 1 Cash flows from operating activities Inflow from customers $ 16,000 Outflow for inventory 27,275 (28,175) Outflow for selling and administrative expense (2,850) Net cash flow from operating activities S 12,250 Cash flows from investing activities: Cash flows from financing activities: 43,000 Net cash flow from financing activities Net change in cash 43,000 55,250 Plus: Beginning cash balance Ending cash balance < Required B $ 55,250 Required C >