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Junker's Stash started the Year 2 accounting period with the balances given in the financial statements model shown as follows. During Year 2 , Junker's

Junker's Stash started the Year 2 accounting period with the balances given in the financial statements model shown as follows.
During Year 2, Junker's Stash experienced these business events:
Paid cash to purchase $94,000 of merchandise inventory.
The goods that were purchased in Event 1 were delivered FOB destination. Freight costs of $1,880 were paid in cash by the
responsible party.
3a. Sold merchandise for $108,000 under terms 110,n30.
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.
The merchandise in Event 3a was sold to customers FOB destination. Freight costs of $1,890 were paid in cash by the responsib
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.
Paid cash of $7,450 for selling and administrative expenses.
Sold the land for $10,300 cash.
Required
a. Record the 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.
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