Pam's Creations had the following sales and purchase transactions during Year 2. Beginning inventory consisted of 60 items at $350 each. The company uses the FIFO cost flow assumption and keeps perpetual inventory records.

Date	Transaction	Description
March 5	Purchased	50 items @ $ 370
April 10	Sold	30 items @ $ 450
June 19	Sold	60 items @ $ 450
September 16	Purchased	70 items @ $ 390
November 28	Sold	45 items @ $ 480

Required

1. Record the inventory transactions in a financial statements model.
2. Calculate the gross margin Pam's Creations would report on the Year 2 income statement.
3. Determine the ending inventory balance Pam's Creations would report on the December 31, Year 2, balance sheet.

PAM'S CREATIONS Horizontal Statements Model Balance Sheet Income Statement Event Number Retained Statement of Cash Flows Cash + Inventory Revenue Expenses Net Income Earnings 1/1 21,000 21,000 3/5 (18,500) + 18,500 0 0 0 0 21,000 (18,500) OA 4/10 13,500 + 0 13,500 13,500 0 = 0 13,500 OA 4/10 0 + 10,500 = (10,500) 0 10,500 3,000 0 6/19 27,000 + 0 27,000 27,000 0 0 27,000 OA 6/19 0 9/16 (27,300) + (21,600) 27,300 = (21,600) 0 21,600 = 5,400 0 0 0 0 0 (27,300) OA 11/28 21,600 + 0 21,600 21,600 0 = 0 21,600 OA 11/28 0 + (17,150) (17,150) 0 17,150 4,450 x 0 Balance 16,300 + 17,550 12,850 62,100 49,250 = 12,850 16,300 NC