Powell Company began the 2018 accounting period with $43,000 cash, $89,000 inventory, $63,000 common stock, and $69,000 retained earnings. During 2018, Powell experienced the following events:

Sold merchandise costing $59,500 for $102,500 on account to Prentise Furniture Store.

Delivered the goods to Prentise under terms FOB destination. Freight costs were $1,000 cash.

Received returned goods from Prentise. The goods cost Powell $4,300 and were sold to Prentise for $5,400.

Granted Prentise a $3,300 allowance for damaged goods that Prentise agreed to keep.

Collected partial payment of $83,500 cash from accounts receivable.

Required

Record the events in a statements model shown below.

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

Why would Prentise agree to keep the damaged goods?

10 Record the events in a statements model shown below. (Enter any decreases to account balances and cash outflows with a minus to designate operating activity, IA for investing activity, FA for financing activity, and NA for no affect.) Assets Accounts Event No. POWELL COMPANY Financial Statements Model for 2018 = Stockholders' Equity Income Statement Common Retained Net Revenue - Expenses Stock Earnings Income 89,000 = 63,000 + 69,000 Statement of Cash Flows points Cash + Receivable + Inventory = X 01:15:36 Bal. 43,000 + 1a. 1b. + eBook + + 11111111111 + + + + + 43,000 + Total 0 + 63,000 + 89,000 = 69,000 Prey 19 of 14 Next >