Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Justin Swords started a small merchandising business in 2014. The business experienced the following events during its first year of operation. Assume that Swords uses

Justin Swords started a small merchandising business in 2014. The business experienced the following events during its first year of operation. Assume that Swords uses the perpetual inventory system. 1. Acquired $56,000 cash from the issue of common stock. 2. Purchased inventory for $34,000 cash. 3. Sold inventory costing $24,000 for $36,000 cash. Required a. Record the events in a statements model like the one shown below. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) b. Prepare an income statement for 2014 (use the multistep format).

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental Audits

Authors: Cliff VanGuilder

1st Edition

1938549600, 978-1938549601

More Books

Students also viewed these Accounting questions

Question

Discuss five types of employee training.

Answered: 1 week ago

Question

Identify the four federally mandated employee benefits.

Answered: 1 week ago