Exercise 4-17A (Algo) Comprehensive exercise with sales discounts LO 4-2, 4-3, 4-4, 4-6, 4-7, 4-8 Junker's Stash started the Year 2 accounting period with the balances given in the following horizontal financial statements model. During Year 2, Junker's Stash experienced the following business events: 1. Paid cash to purchase $86,000 of merchandise inventory. 2. The goods that were purchased in Event 1 were delivered FOB destination. Transportation costs of $1,720 were paid in cash by the responsible party. 3a. Sold merchandise for $96,000 under terms 1/10, n/30. 3b. Recognized $49,900 of cost of goods sold. 4a. Junker's Stash customers returned merchandise that was sold for $2,420. 4b. The merchandise returned in Event 4a had cost Junker's Stash $1,410. 5. The merchandise in Event 3a was sold to customers FOB destination. Transportation costs of $1,810 were paid in cash by the responsible party. 6a. The customers paid for the merchandise sold in Event 3a within the discount period. Recognized the sales discount. 6b. Collected the balance in the accounts receivable account. 7. Paid cash of $7,250 for selling and administrative expenses. 8. Sold the land for $9,900 cash. Required a. Record the above transactions in a horizontal financial statements model. b. Determine the amount of net sales. c. Prepare a multistep income statement. Include common size percentages on the income statement. d. The return-on-sales ratio for Junker's Stash during the prior year was 12 percent. Based on the common size data in the income statement, did the expenses for Junker's Stash increase or decrease in Year 2? Assume sales are the same for both years. Required A Required B Required C Required D Record the above transactions in a horizontal financial statements model. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is your answers to the nearest whole dollar amount.) JUNKER'S STASH Financial Statements Model Balance Sheet Income Statement Expensel = Net Income Statement of Cash Loss Flow Assets Revenue! Gain Cash + Accounts Receivable + Inventory + Land = Event No. Beg. bal. 1. Stockholders' Equity Common Retained Stock Earnings 86,000 + 40,800 + 96,000 + + 16,600 + 14,200 = + + + + + = 2. + + + = + . + + + + 3b. + + + + = 4a. + + + + 4b. + + + + 5. + + + + . + + + + + 6b. + + + + = 7. + + + + + 8. + + + + + + End. bal. 96,000 + 0 + 16.600 + 14,200 = 86,000 + 40,800 0 0 = 0 0 Required A Required B Required C Required D Determine the amount of net sales. (Round your intermediate calculations and final answer to 1 decimal place.) Net sales Required A Required B Required C Required D Prepare a multistep income statement. Include common size percentages on the income statement. (Round your answers to 1 decimal place.) JUNKER'S STASH Income Statement For the Year Ended December 31, Year 2 % % 0.0 0.0 % Operating expenses % % % Total operating expenses 0.0 0.0 % 0.0 0.0 % Non-operating items % $ 0.0 0.0 % Required A Required B Required C Required D The return-on-sales ratio for Junker's Stash during the prior year was 12 percent. Based on the common size data in the income statement, did the expenses for Junker's Stash increase or decrease in Year 2? Assume sales are the same for both years. Did the expenses for Junker's Stash increase or decrease in Year 2? Exercise 4-17A (Algo) Comprehensive exercise with sales discounts LO 4-2, 4-3, 4-4, 4-6, 4-7, 4-8 Junker's Stash started the Year 2 accounting period with the balances given in the following horizontal financial statements model. During Year 2, Junker's Stash experienced the following business events: 1. Paid cash to purchase $86,000 of merchandise inventory. 2. The goods that were purchased in Event 1 were delivered FOB destination. Transportation costs of $1,720 were paid in cash by the responsible party. 3a. Sold merchandise for $96,000 under terms 1/10, n/30. 3b. Recognized $49,900 of cost of goods sold. 4a. Junker's Stash customers returned merchandise that was sold for $2,420. 4b. The merchandise returned in Event 4a had cost Junker's Stash $1,410. 5. The merchandise in Event 3a was sold to customers FOB destination. Transportation costs of $1,810 were paid in cash by the responsible party. 6a. The customers paid for the merchandise sold in Event 3a within the discount period. Recognized the sales discount. 6b. Collected the balance in the accounts receivable account. 7. Paid cash of $7,250 for selling and administrative expenses. 8. Sold the land for $9,900 cash. Required a. Record the above transactions in a horizontal financial statements model. b. Determine the amount of net sales. c. Prepare a multistep income statement. Include common size percentages on the income statement. d. The return-on-sales ratio for Junker's Stash during the prior year was 12 percent. Based on the common size data in the income statement, did the expenses for Junker's Stash increase or decrease in Year 2? Assume sales are the same for both years. Required A Required B Required C Required D Record the above transactions in a horizontal financial statements model. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is your answers to the nearest whole dollar amount.) JUNKER'S STASH Financial Statements Model Balance Sheet Income Statement Expensel = Net Income Statement of Cash Loss Flow Assets Revenue! Gain Cash + Accounts Receivable + Inventory + Land = Event No. Beg. bal. 1. Stockholders' Equity Common Retained Stock Earnings 86,000 + 40,800 + 96,000 + + 16,600 + 14,200 = + + + + + = 2. + + + = + . + + + + 3b. + + + + = 4a. + + + + 4b. + + + + 5. + + + + . + + + + + 6b. + + + + = 7. + + + + + 8. + + + + + + End. bal. 96,000 + 0 + 16.600 + 14,200 = 86,000 + 40,800 0 0 = 0 0 Required A Required B Required C Required D Determine the amount of net sales. (Round your intermediate calculations and final answer to 1 decimal place.) Net sales Required A Required B Required C Required D Prepare a multistep income statement. Include common size percentages on the income statement. (Round your answers to 1 decimal place.) JUNKER'S STASH Income Statement For the Year Ended December 31, Year 2 % % 0.0 0.0 % Operating expenses % % % Total operating expenses 0.0 0.0 % 0.0 0.0 % Non-operating items % $ 0.0 0.0 % Required A Required B Required C Required D The return-on-sales ratio for Junker's Stash during the prior year was 12 percent. Based on the common size data in the income statement, did the expenses for Junker's Stash increase or decrease in Year 2? Assume sales are the same for both years. Did the expenses for Junker's Stash increase or decrease in Year 2