Pizza Express Inc. began the Year 2 accounting period with $8,500 cash, $6,000 of common stock, and $2,500 of retained earnings. Pizza Express was affected by the following accounting events during Year 2: 1. Purchased $11,500 of supplies on account. 2. Earned and collected $25,000 of cash revenue. 3. Paid $10,000 cash on accounts payable. 4. Adjusted the records to reflect the use of supplies. A physical count indicated that $2,700 of supplies was still on hand on December 31, Year 2. Required a. Show the effects of the events on the financial statements using a horizontal statements model given below. In the Cash Flows column, use OA to designate operating activity, FA for financing activity, IA for investing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The beginning balances have been entered as an example. (Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require entry.) Event No. PIZZA EXPRESS INC. Effect of Events on Financial Statements for Year 2 Assets = Liabilities + Stockholders' Equity Income Statement Accounts Common Retained Net Cash + Supplies = Payable Stock Earnings Revenue - Expense = Income 8,500 + 6,000+ 2,500 Statement of Cash Flows + + = + + Beg. bal. 1. 2. 3. 4. Totals + = + + = + = + = + + + + + = + +