Exercise 3-5A (Algo) Recording inventory transactions in a financial statements model LO 3-1 Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $19,500 cash from the issue of common stock. 2. Purchased inventory for $5,400 cash. 3. Sold inventory costing $3,240 for $5,508 cash. 4. Paid $750 for advertising expense. Required 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. (Not every cell will require entry. Enter any decreases to account balances and cash outflows with a minus sign.) Assets Answer is not complete. MILO CLOTHING Effect of Events on the Financial Statements Stockholders' Equity Event Cash Inventory 19,500+ Common Stock + 2 (5,400) + 5,400 - 3a 5,508 + + 3b. (3,240) 4 (750)+ 4 Total 18.858 2.160 4 0 + Retained Revenue Earnings Expenses = = Not Income Statement of Cash Flows 0 0 0 0