Hello,

I have a hard time solving this question. Can anyone please help me to solve this problem and send me the step by step solution?

Thanks,

The following trial balance pertains to Benjis Grocery as of January 1, 2018:

Account Title	Beginning Balances
Cash		$	64,000
Accounts receivable			12,000
Merchandise inventory			90,000
Accounts payable			7,500
Common stock			89,000
Retained earnings			69,500

The following events occurred in 2018. Assume that Benjis uses the periodic inventory method.

1. Purchased land for $30,000 cash.

2. Purchased merchandise on account for $230,000, terms 1/10, n/45.

3. Paid freight of $2,100 cash on merchandise purchased FOB shipping point.

4. Returned $8,600 of defective merchandise purchased in Event 2.

5. Sold merchandise for $186,000 cash.

6. Sold merchandise on account for $236,000, terms 2/10, n/30.

7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.

8. Paid $28,500 cash for selling expenses.

9. Collected $156,000 of the accounts receivable from Event 6 within the discount period.

10. Collected $56,000 of the accounts receivable but not within the discount period.

11. Paid $17,100 of other operating expenses.

12. A physical count indicated that $48,300 of inventory was on hand at the end of the accounting period.

Required:

1. Record the preceding transactions in a horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts not affected by the event. The beginning balances have been recorded as an example.

2. Prepare a schedule of cost of goods sold and an income statement.