Powell Company began the Year 3 accounting period with $41,000 cash, $87,000 inventory, $61,000 common stock, and $67,000 retained earnings. During Year 3, Powell experienced the following events: 1. Sold merchandise costing $58,500 for $100,500 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $800 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,100 and were sold to Prentise for $6,000. 4. Granted Prentise a $3,100 allowance for damaged goods that Prentise agreed to keep 5. Collected partial payment of $81,500 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 Req B2 Req 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 Flow column, use the initials OA 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 event, leave the cell blank. Not every cell will require entry.) Event No. Assets Accounts Receivable POWELL COMPANY Financial Statements Model for Year 3 Stockholders' Equity Income Statement Common Retained Net + Inventory - Stock Revenue Expenses = Earnings Income + 87,000 61,000+ 67,000 Statement of Cash Flows Cash 41,000 + Bal. 1a. 1b. + + + + 2. + + + + 3a 3b. 4. 5. Total II.1 11 41,000 0 87,000 61,000+ 67,000 0 0 0 ReqA Req B1 > Powell Company began the Year 3 accounting period with $41,000 cash, $87,000 inventory, $61,000 common stock, and $67,000 retained earnings. During Year 3, Powell experienced the following events: 1. Sold merchandise costing $58,500 for $100,500 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $800 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,100 and were sold to Prentise for $6,000. 4. Granted Prentise a $3,100 allowance for damaged goods that Prentise agreed to keep 5. Collected partial payment of $81,500 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 Req B2 Req B3 Reqc Prepare an income statement for Powell Company. POWELL COMPANY Income Statement For the Year Ended December 31, Year 3 0 Operating expenses $ Powell Company began the Year 3 accounting period with $41,000 cash, $87,000 inventory, $61,000 common stock, and $67,000 retained earnings. During Year 3, Powell experienced the following events: 1. Sold merchandise costing $58,500 for $100,500 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $800 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,100 and were sold to Prentise for $6,000. 4. Granted Prentise a $3,100 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $81,500 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 Req B1 Req B2 Req B3 Reqc Prepare a balance sheet for Powell Company. POWELL COMPANY Balance Sheet As of December 31, Year 3 Assets $ 0 Total assets Liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity 0 0 $ Powell Company began the Year 3 accounting period with $41,000 cash, $87,000 inventory, $61,000 common stock, and $67,000 retained earnings. During Year 3, Powell experienced the following events: 1. Sold merchandise costing $58,500 for $100,500 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $800 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,100 and were sold to Prentise for $6,000. 4. Granted Prentise a $3,100 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $81,500 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. ReqA Req B1 Req B2 Req B3 Reqc Prepare a statement of cash flows for Powell Company. (Cash outflows should be indicated with a minus sign.) POWELL COMPANY Statement of Cash Flows For the Year Ended December 31, Year 3 Cash flow from operating activities $ 0 Net cash flow from operating activities Cash flows from investing activities: Cash flows from financing activities: Net change in cash 0 Ending cash balance 0 Powell Company began the Year 3 accounting period with $41,000 cash, $87,000 inventory, $61,000 common stock, and $67,000 retained earnings. During Year 3, Powell experienced the following events: 1. Sold merchandise costing $58,500 for $100,500 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $800 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,100 and were sold to Prentise for $6,000. 4. Granted Prentise a $3,100 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $81,500 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 Req B2 Req B3 Reqc Why would Prentise agree to keep the damaged goods? (Select "Yes" if the item is a reason to agree, and "No" if it is not.) Get goods at reduced cost. Can resell the damaged goods. Repair the damaged goods Retain the damaged goods. ( Req B3 Rec