Powell Company began the Year 2 accounting period with $19.800 cash, 560,400 inventory. $48,500 common stock, and $31.700 retained earnings. During Year 2, Powell experienced the following events: 1. Sold merchandise that cost $36,800 for $75,100 on account to Prentise Furniture Store 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $310 cash 3. Received returned goods from Prentise. The goods cost Powell $1820 and were sold to Prentise for $3.950. 4. Granted Prentise a $1,140 allowance for damaged goods that Prentise agreed to keep 5. Collected partial payment of $52,900 cash from accounts receivable. Exercise 4-16A Part c. Prepare an income statement, balance sheet and statement of cash flows (Statement of Cash Flows only, items to be deducte must be indicated with a negative amount.) POWELL COMPANY Income Statement For the Year Ended December 31, Year 2 Net sales Cost of goods sold Gross margin Operating expenses Transportation-out Net income $ 0 0 POWELL COMPANY Balance Sheet As of December 31, Year 2 Assets Cash Accounts receivable Merchandise inventory Total assets $ 0 Liabilities Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 0 0 $ ok es POWELL COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities Cash inflow from customers Cash outflow for expenses nt ences 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Plus Beginning cash balance Ending cash balance 0 $ 0