Powell Company began the Year 3 accounting period with $42,000 cash, $88,000 inventory, $62,000 common stock, and $68,000 retained earnings. During Year 3. Powell experienced the following events: 1. Sold merchandise costing $59,000 for $101,500 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 $4,200 and were sold to Prentise for $5,200. 4. Granted Prentise a $3,200 allowance for damaged goods that Prentise agreed to keep 5. Collected partial payment of $82,500 cash from accounts receivable. Required . 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? Event No. Assets Accounts Receivable POWELL COMPANY Financial Statements Model for Yoar 3 Stockholders' Equity Income Statement Common Retained Net Revenue Expenses Stock Earnings Income 62.000+ 68,000 Statement of Cash Flows Cash Inventory Bal 42.000 88,000 Ta 1b 2 3b + 4 5 Total 42.000 0 + 88,000 62,000+ 68,000 0 0 0 0 Required 11 ) Print Prepare an income statement for Powell Company. POWELL COMPANY Income Statement For the Year Ended December 31, Year 3 0 Operating expenses $ $ 0 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 $ pare d Sidler 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 Why would Prentise agree to keep the damaged goods? (Select which of the following statements (is) are true by selecting an X Get goods at reduced cost Can resell the damaged goods Report the damaged goods Retain the damaged goods