Exercise 4-4A (Algo) Recording inventory transactions in a horizontal financial statements model LO 4-1

Milo Clothing experienced the following events during Year 1, its first year of operation:

1. Acquired $16,000 cash from the issue of common stock.
2. Purchased inventory for $6,100 cash.
3. Sold inventory costing $3,660 for $6,222 cash.
4. Paid $1,000 for advertising expense.

Required Record the events in a horizontal financial statements model. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. 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 no corresponding input needed.) MILO CLOTHING Effect of Events on the Financial Statements Balance Sheet Income Statement Assets Stockholders' Equity Common Retained Revenue Expenses = Net Income Inventory Stock Earnings Event Statement of Cash Flows Cash + + 1. + = + 2. + + 3a. + = 3b. + + 4. + + + Total 0 0 0 + 0 = 0 0