Exercise 3-4A (Algo) Effect of inventory transactions on the income statement and statement of cash flows: Perpetual system LO 3-1 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. 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 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. Req A Req B 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 finar 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 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 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 sign.) HARDY MERCHANDISING COMPANY Effect of Events on the Financial Statements Balance Sheet Stockholders' Equity Income Statement Statement of Cash Net Flows Common Retained Revenue Expenses Income Event Cash Assets Accounts Receivable Inventory Liabilities + Accounts Payable Beg bal 18.500 1. 28 B 70 3 4 5 End bal Stock 18.500 Earnings Req to E> 2 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. oints Complete this question by entering your answers in the tabs below. eBook Print References Req A Req B to E What is the balance of accounts receivable, accounts payable, amounts of gross margin, net operating activities at the end of Year 1? (Indicate cash outflows with minus sign.) b. Accounts receivable c Accounts payable d Gross margin Net income e. Net cash flow from operating activities < Req A Beg B to E>