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 $94,000 of merchandise inventory. 2. The goods that were purchased in Event 1 were delivered FOB destination. Transportation costs of $1,880 were pald in cash by the responsible party. 3a. Sold merchandise for $108,000 under terms 1/10,n/30. 3b. Recognized $53,900 of cost of goods sold. 4a. Junker's Stash customers returned merchandise that was sold for $2,580, 4b. The merchandise returned in Event 4a had cost Junker's Stash $1,490. 5. The merchandise in Event 3 a was sold to customers FOB destination. Transportation costs of $1,890 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 $7,450 for selling and administrative expenses. 8. Sold the land for $10,300 cash. Required: a. Record the above transections 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 priof 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. Record the above transactions in a horitcntal finandal statements model. Noter to the-Cabh How column, use GA to designate operating activity, IA for investment activity, FA for financing activity, and NC for Net ehatige in cash, Enter any decre? minas sign. Not all colss in the "Statement of Cash Fows" cohumn may reoulre an input - leave Cells blank if there is no corresponding ingut needed. Round your any dects ti Dotertine the amount of net saies. Note; Round your intermediate calculations and final answer to 1 decimal place. Prepare a multistep income statement. Include common size percentages on the income statement. Note: Round your answers to 1 decimal place. 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. kid the oxpenses for Junker's Stash increase or decrease in Year 2
