POWELL COMPANY Financial Statements Model For Year 3 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 $900cash. 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? Prepare a balance sheet for Powell Company. Prepare an income statement for Powell Company. Record the events in a statements model shown below. (Enter any decreases to account balances and cash outflows with a minus to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the account is not every cell will require entry.) Prepare a statement of cash flows for Powell Company. (Cash outflows should be indicated with a minus sign.) 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.)