Powell Company began the 2018 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. During 2018, Powell experienced the following events:

1. Sold merchandise costing $58,000 for $99,500 on account to Prentise Furniture Store.

2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $900 cash.

3. Received returned goods from Prentise. The goods cost Powell $4,000 and were sold to Prentise for $5,900.

4. Granted Prentise a $3,000 allowance for damaged goods that Prentise agreed to keep.

5. Collected partial payment of $81,000 cash from accounts receivable.

Required

a. Record the events in a statements model shown below.

b. Prepare an income statement, a balance sheet, and a statement of cash flows.

c. Why would Prentise agree to keep the damaged goods?

a.

b.

b.

b.

c.

a. Record the vents in a statements mocel shown belaw b. Prepare an income statement, a balance sheet, and a statemernt of cash lows c. Why would Hrentise agree to keep the damagec goods Complete this question by entering your answers in the tabs below. Reg 4 Reg 1 Req B2 Req B3 Rea Record the events in a statements medel showan below. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow oolumn, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, and NA for ne affect.) POWELL COMPANY Financial Statements Model tor 2018 Stockholders Equity Assels Income Stuterment Event Statement of Cash Nel Ir Accounts Common Stock Retained + No. Elows Revanue Expansan Cash Receivuble Inventory Earnings 6,000 6000- 0,000+ Bal. 40000 1a 1b 2 3 3b 5 60.000 - Total 8000 66 Reg A Reg B1 Complete this question by entering your answers in the tabs below. Ren R Ren A Ren R1 Ren A3 Ranc Frepare an income statement for Powell Company. POWELL COMPANY income Statamant For the Yeur Ended December 31, 2018 Operating xpansas Req A Req B2 Complete this question by entering your answers in the tabs below. Rea B1 Rep A Rea B2 Reg R3 Rea C Prepare a balance sheet for Fuwell Company POWFLL COMPANY Bulance Sheet As of December 31, 2018 Arcets Tocal assela Lisbiilies Stockholders' equity Total stackholders equity Jotal Japilties and stockholdars' oqulty 0 Complete this question hy entering your answers in the tabs helow Roa A Raq B1 Roa B2 Rog B3 Req C Prenare a statement of cash fiows for Powell Oompany. Amounts to he deducted should be indicated with minus sign. POWELL COMPANY Statement of Cash Flawa For the Yeaur Ended December 31, 2018 Cash flow from operating activtics Not cash flow from operating acthttics S Cash tlows trom invastng actv Css ows Fum fincing ivilies Net change in cach Fnding caah halance