Exercise 3-4 Effect of inventory transactions on the income statement and statement of cash flows: Perpetual system LO 3-1 During 2018, Hardy Merchandising Company purchased $40,000 of inventory on account. Hardy sold Inventory on account that cost $24.500 for $38,000. Cash payments on accounts payable were $22,000. There was $26,000 cash collected from accounts receivable. Hardy also paid $5,100 cash for operating expenses. Assume that Hardy started the accounting period with $20,000 in both cash and common stock Required a. Record the 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 b. What is the balance of accounts receivable at the end of 2018? c. What is the balance of accounts payable at the end of 2018? d. What are the amounts of gross margin and net income for 2018? e. Determine the amount of net cash flow from operating activities. Complete this question by entering your answers in the tabs below. Req A Reg to E Record the 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, the element is not affected by the event, leave the cell blank. (Not every cell will require entry. Enter any decreases to account balances and cash outflows with a minus HARDY MERCHANDISING COMPANY Effect of Events on the Financial Statements Balance Sheet Income Statement Assets Event = Liabilities - Statement of Cash Stockholders' Equity Net Accounts Common Accounts Flows Revenue - Expenses Cash Retained + Inventory Income Receivable Payable Stock Earnings Ran hal on 2 a. Record the events in a horizontal statement model in the Cash Flow column, use DA to designate operating activity, IA for Investment activity. FA for fnancing activity, or NC for not change in cash. If the element is not affected by the event, leave the cell blank b. What is the balance of accounts receivable at the end of 2018? c. What is the balance of accounts payable at the end of 20187 d. What are the amounts of gross margin ned net income for 2018? e. Determine the amount of net cash flow from operating activities 12.5 DO Complete this question by entering your answers in the tabs below. RGA Recto What is the balance of accounts receivable, accounts payabia, amounts of gross margin, net income and net can now from operating activities at the end of 2018? (Indicate cash outhows with mission) Helen Accounts rovati Accounts payable cou margin Not income Nel cash flow om operating
