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 $80,000 cash from the issue of common stock. 2. Purchased $81,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $850 paid in cash. 4. Sold inventory on account that cost $47,000 for $89,000. S. Freight cost on the goods sold in Event 4 was $730. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $5,940 worth of goods that had a cost of $3,020. 7. Collected $72,980 cash from accounts receivable. 8. Paid $67,200 cash on accounts payable. 9. Paid $3,500 cash for advertising expense. 10. Paid $3,180 cash for insurance expense. Required: a. Which of these events affect period (selling and administrative) costs? Which result in product costs? b. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first event is recorded as an example. Complete this question by entering your answers in the tabs below. Answer is not complete.

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 $80,000 cosh from the issue of common stock. 2. Purchased $81,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point: freight cost of $850 poid in cash. 4. Sold inventory on account that cost $47,000 for $89,000. 45. Freight cost on the goods sold in Event 4 was $730. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $5,940 worth of goods that had a cost of $3,020 7. Collected $72,980 cash from accounts receivable. 8. Paid $67,200 cash on accounts payable. 9. Paid $3,500 cash for advertising expense. 10. Paid $3,180 cash for insurance expense. Required: a. Which of these events affect period (selling and administrative) costs? Which result in product costs? b. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Aiso, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing octivities (IA), or financing activities (FA). The first event is recorded as an example. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash fiows. More specifically, record the