Question
Powell Company began the Year 3 accounting period with $44,000 cash, $90,000 inventory, $64,000 common stock, and $70,000 retained earnings. During Year 3, Powell experienced
Powell Company began the Year 3 accounting period with $44,000 cash, $90,000 inventory, $64,000 common stock, and $70,000 retained earnings. During Year 3, Powell experienced the following events
- Sold merchandise costing $60,000 for $103,500 on account to Prentise Furniture Store.
- Delivered the goods to Prentise under terms FOB destination. Transportation costs were $1100 cash.
- Received returned goods from Prentise. The goods cost Powell $4 400 and were sold to Prentise for $5,600.
- Granted Prentise a $3,400 allowance for damaged goods that Prentise agreed to keep.
- Collected partial payment of $84,500 cash from accounts receivable.
Required:
- Record the events in a horizontal financial statements model.
- Prepare an income statement, a balance sheet, and a statement of cash flows.
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Cornerstones Of Financial And Managerial Accounting Fnec 220
Authors: Jay S. Rich, Jeff Jones, Dan L. Heitger, Maryanne M. Mowen, Don R. Hansen
2nd Edition
1133275583, 978-1133275589
