Powell Company began the Year 3 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. During Year 3, 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? Complete this question by entering your answers in the tabs below. Req A Req B1 Reg B2 Reg B3 Reqc Record the events in a statements model shown below. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash FIC to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the account is not affected by the eve every cell will require entry) Assets Event No. POWELL COMPANY Financial Statements Model For Year 3 Stockholders' Equity Income Statement Common Retained + Inventory - Net Stock Revenue Earnings Expenses Income 86,000 60.000 + 66,000 Cash Accounts Receivable Statement of Cash Flows Bal. 40,000 1a 1b. 2